Q4 2023 Alibaba Group Holding Ltd Earnings Call
Operator: Thank you for watching! Youssef Squali, Mark Mahaney, Ken Sena, Zachary Schwartzman, Eddie Leung, Gregory Zhao, and stay tuned for Season 2!
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Speaker Change: Good day, ladies and gentlemen, thank you for standing by welcome to Alibaba Group December quarter 2023 results Conference call.
Operator: Good day, ladies and gentlemen. Thank you for standing by. Welcome to Alibaba Group's December quarter 2023 results conference call. At this time, all participants are in listen-only mode.
Speaker Change: At this time all participants are in listen only mode. After management's prepared remarks, there will be a Q&A session.
Operator: After management's prepared remarks, there will be a Q&A session. I would now like to turn the call over to Rob Lin, Head of Investor Relations at Alibaba Group. Please go ahead.
Speaker Change: I would now like to turn the call over to Rob Lin head of Investor Relations of Alibaba Group.
Rob Lin: Please go ahead.
Rob Lin: Good day, everyone and welcome to Alibaba Group's December quarter, 2023 results conference call with US are Joe Tsai Chairman Eddie.
Rob Lin: Good day everyone, and welcome to Alibaba Group's December quarter 2023 results conference call. With us are Joe Tsai, Chairman; Eddie Wu, Chief Executive Officer; and Obishu, Chief Financial Officer.
Rob Lin: <unk> Chief Executive Officer of V Shea Chief Financial Officer, we.
Rob Lin: We have also invited Jiang Fan, CEO of Alibaba International Digital Commerce Group, ARDC, to join the call. The call is also being webcast on the IR section of our corporate website. A replay of the call will be available on our website later today.
Jump: We have also invited jump on CEO of Alibaba International and digital Commerce Group D C who joined the call.
Jump: This cost is also being webcast on the IR section of our corporate website, a replay of the call will be available on our website later today.
Rob Lin: Now, let me cover the safe harbor. Today's discussion may contain forward-looking statements, including, without limitation, statements about our lean organization and governance structure. Strategies and business plans as well as our beliefs and expectations about our business prospects, such as the future growth of our business revenue and return on investment. We are looking for statements involving inherent risks and uncertainties that may cause actual results to differ materially from our current evidence. For detailed discussions of these risks and uncertainties, please refer to our latest annual report on Form 20-F and other documents filed with the U.S., which were announced on the website of the Hong Kong... Any forward Thank you. Please note that certain financial measures that we used on this call, such as adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, non-GAAP diluted earnings per share, or ADF, and Free Cash Flow are expressed on a non-GAAP basis. Our GAAP results and reconciliation of GAAP-to-none GAAP measure can be found in earnings questions.
Jump: Now let me cover the Safe Harbor today's discussion may contain forward looking statements, including without limitation statements about knee organization named government structure strategies and business plan.
Jump: So our beliefs and expectations about our business prospects.
Jump: Such as the future growth of our business revenue and return on investment.
Jump: Forward looking statements involve inherent risks and uncertainties that may cause actual results to differ materially from our current expectations for detailed discussions of these risks and uncertainties. Please refer to our latest annual report on form 20-F, and other documents filed with the U S. SEC.
Jump: Now on the website of the Hong Kong stock exchange any forward looking statements that we make on this call are based on assumptions as of today and we do not undertake any obligation to update these statements.
Jump: As required under applicable law.
Jump: Please note that certain financial measures that we use on this call such as adjusted EBITDA adjusted EBITDA margin adjusted EBITA adjusted EBITA margin non-GAAP net income non-GAAP diluted earnings per share or a D. S and free cash flow are expressed on a non-GAAP basis, our GAAP results and reconciliation of GAAP.
Jump: non-GAAP measure can be found in earnings press release.
Eddie Wu: Unless otherwise stated, growth rates of all stated metrics mentioned during this call refer to year-over-year growth versus the same quarter-life. With that, I will now turn to. Hello, everyone.
Jump: Unless otherwise stated growth rate of all stated metrics mentioned during this call refers to year over year growth versus the same quarter last year.
Jump: With that I would now turn to Eddie.
Eddie: Hello, everyone.
Eddie: Over this past quarter, we delivered steady growth, while making organizational adjustments that align with our strategic focus.
Eddie Wu: Over this past quarter, we delivered steady growth while making organizational adjustments that align with our strategic focus. At the same time, we took a deep look at our core business operations and the competitive landscape. We concluded that to maintain our competitive edge, we must increase our investment in core capabilities and adopt a more aggressive approach to competition in order to win growth. Our top priority is to reignite the growth of our two core businesses, e-commerce and cloud computing. During the quarter, the execution of our user-first and competitive pricing strategies in Taobao and Tmall Group, TTG, was effective, resulting in healthy year-over-year GMV growth as the number of active buyers and order volume showed a robust increase. The number of merchants continued to grow at a double-digit rate, and I'll elaborate on the outlook and plans for 2024 in a moment. In cloud computing, we're committed to our strategy of prioritizing public cloud.
Eddie: At the same time, we took a deep look at our core business operations and the competitive landscape.
Eddie: We concluded that to maintain our competitive edge, we must increase our investment in core capabilities and adopt a more aggressive approach towards competition in order to win growth.
Eddie: Our top priority is to reignite the growth of our two core businesses E Commerce and cloud computing.
Eddie: During the quarter the execution of our user first and competitive pricing strategies in Taobao and Tmall Group T. T. G was effective resulting in healthy year over year G. M V growth as the number of active buyers and order volume showed a robust increase the number of merchants continued to grow at a double digit rate and I'll elaborate on the outlook and plans for 'twenty.
Eddie: 24 in a moment and cloud computing, we're committed to our strategy of prioritizing public cloud we are proactively optimized our business structure reduced revenue from project based contracts and increased investment in public cloud of products. These structural adjustments are showing results and Alibaba cloud overall profitability our capability.
Eddie Wu: We have proactively optimized our business structure, reduced revenue from project-based contracts, and increased investment in public cloud products. These structural adjustments are showing results, and Alibaba Cloud's overall profitability capability continues to improve. We've also upgraded Alibaba cloud sales operations, establishing different sales and service systems to serve different types and sizes of customers. By improving our customer coverage and service capabilities, we will enhance our growth. In the international commerce business, we focused on expanding cross-border offerings and enhancing the shopping experience. This quarter, all of AIDC's retail platforms achieved growth, resulting in international digital commerce overall revenues growing at a rapid rate of 44% year-over-year. Tainiao continued to develop its global smart logistics network with cross-border logistics fulfillment solutions, contributing to 24% year-over-year revenue growth, as well as realizing strong synergies with the cross-border e-commerce business.
Eddie: Continues to improve.
Eddie: We've also upgraded Alibaba cloud sales operations, establishing different sales and service systems to serve different types and sizes of customers by improving our customer coverage and service capabilities, we will enhance our growth rate in the international Commerce business, we focused on expanding cross border offerings and enhancing the shopping experience this quarter all of AI D. CS.
Eddie: Our retail platforms achieved growth, resulting in international digital Commerce overall revenue is growing at a rapid rate of 44% year over year tiny all continued to develop its global smart logistics network with cross border logistics fulfillment solutions contributing to 24% year over year revenue growth.
Eddie: As well as realizing strong synergies with the cross border E Commerce business next I'd like to share the strategic priorities for T. T G and investing in capturing growth opportunities TCG operates in the world's most competitive E. Mark E Commerce market, which is China as we carefully evaluate T teaches competitive position within the China E Commerce market, we know that.
Eddie: T. G continues to be number one and G. M B share and is the leading platform for consumer shopping merchants operate on the platform as their primary place of ecommerce business and TPG has the deepest and most comprehensive selection of products amongst its peers. However, we must still make targeted investments and improvements in price competitiveness service and user experience given the <unk>.
Eddie Wu: Next, I'd like to share the strategic priorities for TTG in investing and capturing growth opportunities. TTG operates in the world's most competitive e-commerce market, which is China. As we carefully evaluate TTG's competitive position within the China e-commerce market, we note that TTG continues to be number one in GMV share and is the leading platform for consumer shopping. Merchants operate on the platform as their primary place of e-commerce business, and TTG has the deepest and most comprehensive selection of products amongst its peers. However, we must still make targeted investments and improvements in price competitiveness, service, and user experience. Given that consumers use multiple platforms, returning to a user-centric approach is at the heart of our strategy.
Eddie: <unk> use multiple platforms returning to a user centric approach is at the heart of our strategy, we will increase investment in core user experiences to enhance the customer shopping experience.
I'm confident that by focusing on delivering the incredible taobao or universal Togo experience offering quality products at attractive prices with great service meeting the different needs of different consumer segments T. T. G will earn users' trust and returned to growth.
Eddie: Thus the 'twenty 'twenty four will be a year of comprehensive capability upgrades for T. T. G that also a year of significant investment and we'll be prioritizing investment in the following areas one product supply.
Eddie: We'll increase our investments in growing the selection of branded products and direct for manufacture of products on Tpg's platform.
Eddie: This will further strengthen our product supply advantages to better address new consumption trends and demands.
Eddie: Two.
Eddie: Competitive pricing of deficiency.
Eddie: We will increase investment into product sourcing capabilities, and optimizing business model relationships between merchants and our platform for different types of suppliers will offer flexible business models that are best suited to improve their operational efficiency and thereby enhance tow boats value proposition the competitive pricing. We're focused on delivering is attractive prices for key.
Eddie: Quality products. This is a demand that consumers have across the cycles and is fundamental to our doing business three quality service, we will work with our merchants and logistics partners to invest in improving the entire consumer service experience, including presale NCL wholesale and logistics.
Eddie: For different customer segments on the platform, we will build a.
Eddie Wu: We'll increase investment in core user experiences to enhance the customer shopping experience. I'm confident that by focusing on delivering the incredible Taobao or universal Taobao experience, offering quality products at attractive prices with great service, meeting the different needs of different consumer segments, TTC will earn users' trust and return to growth. Thus, 2024 will be a year of comprehensive capability upgrades for TTG and also a year of significant investment, and we'll be prioritizing investment in the following areas.
Eddie: Consumer service system that accurately identifies and meets the various needs of the different groups.
Eddie: Sure.
Eddie: Increased purchase frequency.
Through the above investments, we will enhance our comprehensive capabilities to offer quality products at attractive prices with great service.
Eddie: We believe that improving the platform. So overall shopping experience and service quality will lead to increased purchase frequency and materially improve the efficiency of user growth to date Taobao and tmall remain the most valuable shopping platforms and the main place for merchants to do business.
John Fan: With a comprehensive capability planning building plan for 2024, we're confident the T. T. G will return to growth next I'll hand over to John fan to present on D. C.
John Fan: Good evening everybody.
John Fan: Over the past quarter.
John Fan: Despite the uncertain international environment and more intense market competition AI D. C achieved rapid growth total orders grew by 24% year on year, driven by strong growth across all major retail platforms growth in our cross border business was especially significant our three major growth drivers are first.
Eddie Wu: One, product supply. And we'll increase our investments in growing the selection of branded products and direct-from-manufacturer products on TTG's platform. This will further strengthen our product supply advantages to better address new consumption trends. Competitive Pricing and Efficiency will increase investment into product sourcing capabilities and optimize business model relationships between merchants and our platform. For different types of suppliers, we'll offer flexible business models that are best suited to improve their operational efficiency and thereby enhance Taobao's value proposition.
John Fan: Enhanced consumer experience as a result of our business model and supply chain services upgrade second.
John Fan: Product and technology innovation and third our targeted expansion in priority markets.
John Fan: Next I will present, our business results and future development plans around these three drivers.
John Fan: First.
John Fan: As our business model and supply chain services upgrade.
John Fan: Last quarter Aliexpress achieved year on year order growth up over 60%.
John Fan: This was mainly driven by the new AE choice model that we launched in early 'twenty two 'twenty three.
John Fan: And the E choice model.
John Fan: Is in essence, an upgrade that we made to our original pure a platform model into a hybrid.
John Fan: This model.
John Fan: Combines a pop on the one hand with a fully entrusted model on the other and it's underpinned by supply chain efficiency and optimize the supply on the platform by balancing experience with richness of offerings by offering and trusted cross border logistics marketing and other services, we lowered the barrier for merchants to engage in cross border business.
Eddie Wu: The Competitive Pricing we're focused on delivering is attractive prices for quality products. This is a demand that consumers have across cycles and is fundamental to doing business. Three, quality service.
John Fan: Bringing more certainty to their operations and more diverse assortment to the platform at the same time, we continue to enhance the end to end consumer experience, including by providing more stable product quality and more competitive prices by continuing to optimize delivery time and by adding value added services like a local product return.
Eddie Wu: We will work with our merchants and logistics partners to invest in improving the entire consumer service experience, including pre-sale, in-sale, post-sale, and logistics. For different customer segments on the platform, we will build a consumer service system that accurately identifies and meets the various needs of the different customers, increasing purchase frequency. Through the above investments, we will enhance our comprehensive capabilities to offer quality products at attractive prices with great service. We believe that improving the platform's overall shopping experience and service quality will lead to increased purchase frequency and materially improve user growth. Today, Taobao and Tmall remain the most valuable shopping platforms and the main place for merchants to do business.
John Fan: As of January 2020 for choice already made up about half of all aliexpress orders. It's a high quality user experience has driven significant user growth and transaction growth on the aliexpress platform and going forward, we'll continue to invest resolutely to further increase choice penetration and provide a better experience to more users.
John Fan: In terms of product and technology innovation.
John Fan: [noise] serves consumers in different countries and regions around the world, we have already optimized our products in certain key countries and regions in line with local preferences are these efforts have been highly appreciated and we'll continue to pursue that kind of innovation and upgrading we're also actively deploying AI to enhance operating efficiency and lower barriers for merchants or so.
John Fan: Feet of Aib's digital foreign trade products have been officially launched enabling real time language translation AI logistics services rapid generation of images and videos for marketing et cetera.
Jiong Shao: With the comprehensive capability building plan for 2024, we're confident that TTG will return to growth. Next, I'll hand over to Jiang Fan to present on AIG. Good evening, everybody. In the past quarter,
John Fan: Sustained growth in key markets in the last quarter, we achieved good growth in different regional markets.
Jiong Shao: Despite the uncertain international environment and more intense market competition, AIDC achieved rapid growth. Total orders grew by 24% year on year, driven by strong growth across all major retail platforms. Growth in our cross-border business was especially significant. Our three major growth drivers are, first, an enhanced consumer experience as a result of our business model and supply chain services upgrade. Second, product and technology innovation. And third, our targeted expansion in priority markets. Next, I will present our business results and future development plans around these three drivers. First, our business model and supply chain services. Last quarter, AliExpress achieved year-on-year order growth of over 60%. This was mainly driven by the new AE Choice model that we launched in early 2020.
John Fan: And in certain key markets, a achieved breakthrough rapid growth to become the leading platform locally in Turkey, a neighboring markets trendy all continued to achieve robust double digit order growth and maintained its leading position in the Turkish market. It also further expanded its business and valuable new markets in the middle East and Europe, Alibaba Dot com completed its acquisition.
John Fan: <unk> of the well known European B to B digital trade platform visible further expanding its supplier base in the region and further advancing Alibaba Dot coms global expansion and dual brand strategy.
John Fan: There is huge potential for AI D C to increase user penetration in the majority of overseas markets building on our current resources can footprint, we will increase our investment in select regional markets, where we see opportunities in value to a cheap opportunities for high certainty and healthy growth.
John Fan: Going forward, we'll continue to maintain our rapid growth momentum and provide consumers with improved differentiated services to that end, we'll continue to increase our investments in enhancing user experience and business competitiveness, while expanding our business scale. Thank you.
Speaker Change: Thank you Jonathan.
Speaker Change: We achieved a healthy financial performance in the past quarter, driven by steady business momentum and improving operating efficiency in several major businesses.
Jiong Shao: The Eighth Choice Model is, in essence, an upgrade that we made to our original pure platform model into a hybrid business model that combines POP on the one hand with a fully entrusted model on the other, and it's underpinned by supply chain efficiency. It optimizes supply on the platform by balancing experience with richness of offer. By offering entrusted cross-border logistics, marketing, and other services, we lower the barrier for merchants to engage in cross-border business, bringing more certainty to their operations and a more diverse assortment to the platform. At the same time, we continue to enhance the end-to-end consumer experience, including by providing more stable product quality and more competitive prices, by continuing to optimize delivery time, and by adding value-added services like local product return.
Speaker Change: Total consolidated revenue was RMB 263 billion, an increase of 5%.
Speaker Change: Consolidated adjusted EBIDTA increased by 2% to RMB $52 8 billion.
Speaker Change: non-GAAP net income was RMB 48 billion a decrease of 4%.
Speaker Change: Our GAAP net income was RMB 10, 7 billion a decrease of 35 billion that was primarily contributor both attributable to change in <unk>.
Speaker Change: Investment values and in Hammond.
Speaker Change: Firstly, there was a mark to market change from our equity investments of about RMB 19 billion.
Speaker Change: Second amortization.
Speaker Change: Amortization impairment of intangible assets was RMB 14, 6 billion of which RMB 12, 1 billion was related to the center in Hammond.
Speaker Change: Impairment of goodwill was RMB eight 5 billion related to Youll cool.
Speaker Change: Those three items were excluded from non-GAAP net income.
Speaker Change: As of December 31st 2023 we continued to maintain a strong net cash position off on the 487 billion or U S dollar $68 6 billion.
Jiong Shao: And as of January 2024, Choice already made up half of all AliExpress orders. Its high-quality user experience has driven significant user growth and transaction growth on the AliExpress platform, and going forward, AIR-ADC will continue to invest resolutely to further increase Choice penetration and provide a better experience to more users. In terms of product and technology innovation, AIR-ADC serves consumers in different countries and regions around the world.
Speaker Change: Free cash flow this quarter was RMB $56 5 billion a decrease of 31%.
Speaker Change: Creating free cash flow was attributed to increase the capex and several one time factors, including timing of income tax payments and working capital changes related to several of our businesses.
Speaker Change: Now, let's look at the secular without starting with Taobao and Tmall group.
Speaker Change: Revenue for Taobao, and Tmall group was RMB $129 1 billion, an increase of 2%.
Speaker Change: During this quarter, we made a steady progress.
Jiong Shao: We've already optimized products in certain key countries and regions in line with local preferences. These efforts have been highly appreciated, and we will continue to pursue that kind of innovation and upgrading. We're also actively deploying AI to enhance operating efficiency and lower barriers for merchants. Our suite of AI-based digital foreign trade products has been officially launched, enabling real-time language translation, AI logistics services, rapid generation of images and videos for marketing, etc.
Speaker Change: <unk>, our taobao and Tmall strategies, we observed a few positive trend.
Speaker Change: As Eddie mentioned, our online T N D achieved healthy growth with all the volume growing strongly during the quarter, notably the order volumes exhibited double digits year over year growth during the second half of the quota.
Speaker Change: Importantly, we continued our efforts to onboard a wide range of brands and merchants.
A number of operating merchants on our platform continued to grow at double digits and this trend has sustained over the past four quarters.
Jiong Shao: Third, sustained growth in key markets. In the last quarter, we achieved good growth in different regional markets, and in certain key markets, AE achieved breakthrough rapid growth to become the leading platform locally. In Turkey and neighboring markets, Trendyol continued to achieve robust double-digit order growth and maintained its leading position in the Turkish market.
Speaker Change: Additionally, we are also seeing strong growth in pain market.
Speaker Change: Customer management revenue was RMB 92.1 billion relatively flat year over year now.
Speaker Change: The overall take rate increased slightly year over year, mainly because of the increasing Jian Li came from taobao merchants.
Speaker Change: The mixed shift of dnb towards Taobao merchants provide us with further monetization potential it cut the takeaway from Taobao merchants has been improving Wow tmall merchants take rate was unchanged.
Jiong Shao: It also further expanded its business in valuable new markets in the Middle East. In Europe, Alibaba.com completed its acquisition of the well-known European B2B digital trade platform, Visible, further expanding its supplier base in the region and further advancing Alibaba's global expansion and dual-brand strategy. There is huge potential for AIDC to increase user penetration in the majority of overseas markets. Building on our current resources and footprint, we will increase our investment in select regional markets where we see opportunities and value to achieve opportunities for high certainty and healthy growth. Going forward, we'll continue to maintain our rapid growth momentum and provide consumers with improved, differentiated services. To that end, we'll continue to increase our investments in enhancing user experience and business competitiveness while expanding our business scale. Thank you, Jiong.
Speaker Change: During the quarter.
Speaker Change: Accordingly, this trend also reflects increasing consumer demand.
Speaker Change: Competitive products offered on our platform.
Speaker Change: IRA sale and others revenue increased 2% to RMB, 31st a $31 6 billion.
Speaker Change: China Commerce wholesale business revenues increased 23%.
Speaker Change: <unk> 5.3 billion, primarily due to an increasing revenue from value added services of 168 eight dot com.
Speaker Change: How about in Chemo group adjusted EBIDTA increased by 1% to RMB 59, 9 billion. The increase was primarily due to the narrowing losses in certain businesses.
Speaker Change: Partly offset by the increasing investment in content user acquisition and retention, how 'bout DPP as well as technological innovation.
Speaker Change: We are in the process of revitalizing Taobao and Tmall group.
Speaker Change: And position it for future growth, we are beginning to see early signs of GMB growth recovery driven in part by investments made since earlier this fiscal year, we still have a lot of work ahead of us.
Speaker Change: Eddie mentioned, we will invest for future growth and trends in taobao and Tmall groups market leadership.
Speaker Change: Oh, how intelligence group revenue quality continues to improve as we practically reduced revenues from low margin project based contracts.
Obishu: We achieved a healthy financial performance in the past quarter driven by steady business and several major. Total consolidated revenue was RMB260.3 billion, an increase of 5%; consolidated adjusted EBITDA increased by 2% to RMB52.8 billion. Our NGAP net income was RMB48 billion, a decrease of 4%. Our gap net income was RMB10.7 billion, a decrease of $35 billion that was primarily attributable to changes in investment values and impairment. Firstly, there was a market-to-market change from our equity investments of about RMB19 billion, secondly. The Amortization Impairment of Intangible Assets was RMB 14.6 billion, of which RMB 12.1 billion was related to sun-knock impairment. Third, impairment of goodwill was RMB 8.5 billion related to Youku. The above three items were excluded from GAPNet.
Speaker Change: Additionally, we recorded healthy growth of our public how revenue from external customers.
Speaker Change: Revenue from power Intelligence Group was RMB 28, 1 billion this quarter, an increase of 3%.
Speaker Change: Adjusted EBIDTA increased by 86% to RMB, two 4 billion.
Speaker Change: Continuous improvement in all of it.
Speaker Change: Adjusted EBIDTA reflected improving product mix through our fixed oh through our focus on public cloud and operating efficiency.
Speaker Change: Enhance the profitability of power business.
Speaker Change: Our confidence to invest in technology and customers.
Speaker Change: Strength in our public cloud leader hit in the future.
Speaker Change: Alibaba International Digital Commerce group revenue was RMB 28, 5 billion an increase of 44%.
Speaker Change: Revenue from International Commerce retail business increased by 56% to RMB 23, 3 billion increase in revenue was primarily due to solid revenue growth from aliexpress, especially choice business and 10 deal.
Speaker Change: Revenue from our international Commerce wholesale business increased by 8% to RMB five 3 billion.
Speaker Change: The increase was primarily due to an increase in revenue generated by cross border related to value added services from Alibaba Dot com.
Speaker Change: E D C. Adjusted EBITA was a loss of RMB three 1 billion losses increased primarily because of the increase in investment in Alibaba Ali Express is choice.
Obishu: As of December 31, 2023, we continue to maintain a strong net cash position of RMB487 billion, or US$68.6 billion. Free cash flow this quarter was RMB56.5 billion, a decrease of 31%. The decrease in free cash flow was attributed to an increase in capex and several one-time factors, including timing of income tax payments and working capital changes related to several of our businesses. Now let's look at the segment results, starting with Taobao and Tmall Group. The revenue for the Taobao and Tmall Group was RMB129.1 billion, an increase of 2%. During this quarter, we made steady progress to execute our Taobao and Tmall strategies. We observed a few positive trends, as Eddie mentioned. Our online GMV achieved healthy growth, with order volume growing strongly during the quarter. Notably, order volume exhibited double-digit year-over-year growth during the second half of the quarter.
Speaker Change: Our international business.
Speaker Change: Partly offset by improvement in monetization across all major platforms.
Speaker Change: Overall, we have seen is very rapid order and revenue growth of our AI D. C Cross border E Commerce business over the last few quarters.
Speaker Change: Sustained its momentum and provide differentiated services to customers, we increase investment during this quarter and will step up investments to drive further well.
Speaker Change: Total revenue from tiny all grew 24% to RMB 28, 5 billion, primarily contributed by the increasing revenue from cross border fulfillment solution.
Speaker Change: Adjusted EBITA was RMB 961 million.
Speaker Change: <unk> to a loss of RMB 12 million in the same quarter last year. The increase reflected the economies of scale that leads to cost optimization as well as optimize operating expenditure sending.
In the coming quarters as a strategic partner.
Speaker Change: We will increase investments in extending our cross border logistics capabilities to support eight choices.
Speaker Change: Local services group revenue in December quarter grew 13% to RMB 15, 2 billion driven by healthy growth.
Speaker Change: And the rapid growth of a man.
Speaker Change: Local service group adjusted EBITA was a loss of RMB, two 1 billion this quarter compared to a loss of RMB, two 9 billion same quarter last year.
Speaker Change: I'm really due to the continued narrowing of loss from our two home business driven by improved the unit economics and increasing scale.
Speaker Change: Revenue from our <unk> group was RMB 5 billion, an increase of 18% primarily driven by the strong revenue growth of offline entertainment businesses. Adjusted EBIDTA was a loss of RMB 517 million compared to a loss of RMB 391 million.
Obishu: Importantly, we continued our efforts to onboard a wide range of brands and merchants; the number of operating merchants on our platform continued to grow at double digits, and this trend has sustained over the past four quarters. Additionally, we are also seeing strong growth in paying merchants. Customer management revenue was RMB92.1 billion, relatively flat year-over-year.
Speaker Change: The same quarter last year losses increased primarily due to the increased velocity of youku.
Speaker Change: Revenue from all other segment decreased 7% to RMB 47 billion, mainly due to the decrease in revenue from <unk>.
Speaker Change: Just an EBIDTA from all other segments was a loss of RMB, three 2 billion compared to a loss of RMB. One 7 billion in the same quarter last year, primarily due to increase in year over year loss from Sun not due to scale down all certain all businesses.
Obishu: The overall take rate decreased slightly year-over-year, mainly because the increase in GNV came from Taobao Merchants. A mixed shift of GNV towards Taobao merchants, providers with further monetization potential because the take-away from Taobao merchants has been improving while Tmall merchants' take-away was undermining during the quarter. Importantly, this trend also reflects increasing consumer demand for price-competitive products offered on our platform; direct sales and others revenue increased 2% to RMB 31.6 billion. China Commerce Wholesale Business Revenue, The Chinese market has increased 23% to RMB5.3 billion, primarily due to an increase in revenue from value-added services of $160.88. The Alba and Timor Group adjusted EBITDA increased by 1% to RMB59.9 billion.
Speaker Change: Excluding sonata friendship and in time businesses that have physical retail operations.
Speaker Change: Group revenues would have grown at approximately 8% and our group consolidated adjusted EBITDA margin would have been four percentage points higher at approximately 24% this quarter.
Lastly, we remain committed to returning cash to shareholders.
Speaker Change: We have been consistently buying back shares in the 12 months ended December 31, 2023, we have repurchased a U S. Dollar at $9 5 billion in here and have reduced the share count.
Speaker Change: By three 3% after accounting for shares issued under our Aesop.
Additionally quarter today until February six we have repurchased another U S dollar $1 4 billion worth of Powershares.
Obishu: The increase was primarily due to the narrowing losses in certain businesses, due to the increasing investment in content, user acquisition, and retention of the Taobao App, as well as technological innovation. We are in the process of revitalizing Taiwan Timor Group and positioning it for future growth. We are beginning to see early signs of GNV growth recovery, driven in part by investment made earlier this fiscal year.
Speaker Change: Our board of directors has approved the upside of the share repurchase program.
Speaker Change: U S dollar 25 billion through March 'twenty 'twenty seven.
<unk> our share repurchase program demonstrates our strong confidence in our business fundamentals and the cash flow generation capability.
Speaker Change: The upsides, we currently have U S. Dollar 35, 3 billion available under our share repurchase program.
Obishu: We still have a lot of work ahead. As Eddie mentioned, we will invest for future growth. Strand, and Taobao and Tmall Group's market leaders, our cloud intelligence group, revenue, and quality. The conversation continues to improve as we proactively reduce revenue from low margin project-based economies. Additionally, we recorded healthy growth of our public cloud revenue from external customers. Revenue from Cloud Intelligence Group was RMB28.1 billion in this quarter.
Speaker Change: The upsize the program will allow us to achieve a net reduction in share count and achieve EPS and cash flow per share accretion.
Speaker Change: Subject to market condition, we target to achieve at least 3% annual reduction in total shares outstanding for the next three fiscal years.
Speaker Change: Thank you that's the end of our prepared remarks, we can open up for Q&A.
Speaker Change: Tony So English or third party translator will provide consecutive interpretation for the Q&A session.
Please note that the trends translations for convenience purpose only.
Tony: He says that any disc.
Speaker Change: Weapon C I imagine a statement in the origin language will prevail if you will.
Obishu: South Adjusted EBITDA increased by 86% to RMB2.4 billion; continuous improvement in our adjusted epitaph reflected improving product mix through our focus on public cloud and operating enhanced profitability gives us confidence to invest in technology and customers to strengthen our public cloud leadership in the future. Alibaba International Digital Commerce Group revenue worth RMB 28.5 billion; revenue from International Commerce Retail is about 56% to RMB 23.3 billion, primarily due to solid revenue growth from Aliexpress.
Speaker Change: Unable to hear the Chinese translation bilingual transcripts of this call will be available on our website within seven working days after the Chinese new year holiday.
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Speaker Change: Operator, please connect our speaker in conference right now and start the Q&A session when ready. Thank you.
Speaker Change: Thank you if you wish to ask a question. Please press star one on your telephone and wait for your name to be announced.
Obishu: Tran, D.O. revenue from our international commerce wholesale business increased by 8% to RMB5.3 billion. The increase was primarily due to an increase in revenue generated by cross-border related value-added services from Alibaba. AIDC's adjusted EBITDA was a loss of RMB 3.1 billion; losses increased primarily because of the increase in investment in Alibaba AliExpress's choice and improvement in monetization across all major. Overall, we have seen a very rapid order and revenue growth of our AIDC cross-border e-commerce business over the last few quarters and will sustain this momentum, and provide differentiated services. We increased the investment during this quarter and will step Total revenue from Tainiao grew 24% to RMB28.5 billion, primarily contributed by the increase in revenue from cross-border fulfillment solutions. Daniel, I just did a guitar with R&B.
Speaker Change: If you wish to cancel your request please press star two.
Speaker Change: On a speakerphone please pick up the handset to ask your question.
Speaker Change: Give more people the opportunity to ask questions. Please keep yourself to no more than one question at a time.
Your first question comes from Ronald Keung with Goldman Sachs. Please go ahead.
Eddy Leung: Thank you, Joe any fan Tobey and Rob.
Eddy Leung: And wanted to ask about the taobao Tmall take rate this quarter.
Eddy Leung: Just mentioned a slight fall in the blended take rate and you mentioned about the different factors the mix shift, but also to how about take rate increase. So plenty here are what is driving the take rate increase on this on the specific topic.
Obishu: 961 million compared to a loss of RMB 12 million in the same quarter last year. The increase reflected economies of scale that led to cost optimization as well as optimized operating expenditure, coming quarter, and strategic partner of ADIZ. We are increasing that. We are expanding our cross-border logistics capability. Paul E. Choices. Local services group revenue in the December quarter grew 13% to RMB15.2 billion, driven by healthy growth of Ulema and rapid growth of AMAC. Local service group adjusted EBITDA with a loss of RMB 2.1 billion this quarter compared to a loss of RMB 2.9 billion the same quarter last year, primarily due to the continued narrowing of laws from our to-home business driven by Ulema's improved uni-economics and increasing scale. Revenue from our DME Group was RMB5 billion, an increase of 18%, primarily driven by the strong revenue growth of offline entertainment The adjusted EPITAP was a loss of RMB517 million compared to a loss of RMB391 million in the same quarter last year. The increase was primarily due to the increased losses of Youku. Revenue from all other segments decreased 7% to RMB47 billion, mainly due to the decrease in revenue from Sunup.
Eddy Leung: Particularly on top al how how is the adoption of our sales base kind of cost per sale was based on a shift in our AD tech upgrades and just on the blend of their spend how should we when should we expect take rates to stabilize I E. The <unk> and CMI was that to stabilize in the same rate and how should we think about the long term potential.
Eddy Leung: But given that we're still much lower than global peers, and I would say lower than quite up quite a few about China appears though the potential that immediate and in the near term, we want to stabilize and long term potential. Thank you.
Eddy Leung: I mean some of the winter.
Eddy Leung: Sure.
Eddy Leung: It's going through the.
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Obishu: Adjusted EBITDA from all other segments was a loss of RMB 3.2 billion compared to a loss of RMB 1.7 billion in the same quarter last year, primarily due to an increase in year-over-year loss from SUNA due to the scale down of certain of these, Scrooge McDuck, Fred Shippel, and in-time businesses that have physical retail operations. Group revenue would have grown by approximately 8%, and our group consolidated adjusted epitome margin would have been 4 percentage points higher at approximately 24% this quarter. Lastly, we remain committed to returning cash to shareholders. We have been consistently buying back shares. In the 12 months ending December 31, 2023, we have repurchased U.S. dollar 9.5 billion in shares and have reduced the share accounts. By 3.3% of accounting for shares issued under our Additionally, quarter to date until February 6th. We have repurchased another US $ 1.4 billion worth of our shares.
Speaker Change: This quarter actually if you look at the overall take rate chop, a little bit as I was explaining in my script actually this chart for us because of the mix shift as.
Speaker Change: We can see you know.
Speaker Change: Consumers, you know appetite for relative price competitive products grow. So that's why we can see the genes shipped to fall towards the how 'bout merchant.
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Speaker Change: This actually is a as we.
Speaker Change: We see the early success of our offtake execution of our strategy is that you know as we as.
Speaker Change: As announced in the early of the year the strategy for tablet TMR is use a century, so we need to beat up the supply for all of us for all of our consumers, particularly for the price competitive product. So that's why you know this is a set of XI demonstrates the early success of execution of our strategy.
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Speaker Change: So for the siding chop off the takeaway overall take rate we are not too concerned because you know what we believe is as I said you know what taobao merchants to takeaway is growing just like eat what he said, even though the overall take rate in all platform SKU.
Obishu: Our Board of Directors has approved the upsize of the Shared Repurchase Program by another U.S. dollar $25 billion through March 2027. Outsizing our share repurchase program demonstrates our strong confidence in our business fundamentals and cash flow generation capability. Following the upside, we currently have U.S. dollar 35.3 billion available in our share repurchase program. The upsized program will allow us to achieve a net reduction in the share count and achieve EPS and cash flow per share accretion. Subject to market conditions, we target to achieve at least 3% in annual reduction in total share outstanding for the next three fiscal years.
Speaker Change: And relatively lower compared with other platforms, which actually showed a big potential we have in terms of increasing.
Speaker Change: On the take rates via you know.
Speaker Change: So enhancing the operating efficiency on our platform as well as enable merchants to increasing operating efficiency, which will help us to increase our takeaway.
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Operator: Thank you. That's the end of our prepared remarks. We can open up for: Hi everyone, for today's call, you are welcome to ask questions in Chinese or English. The third-party translator will provide consecutive interpretation for the Q&A session.
Speaker Change: Hello, I'm, calling out hunting that you'll file that problems with southern California, Houston being a shell.
Speaker Change: For a woman to a take rate of the U T. N V does it go.
Speaker Change: Could you paint woman one thing, but I can only one Neil you got me I'm sure that you got.
Speaker Change: Oh, it's an issue that you guys tend to you Bob.
Speaker Change: Thank you this is Eddie I'd like to add to that answer at that Toby just case.
Speaker Change: <unk>.
Eddie: Talking a an overall strategic level about how we view the relationship between purchase frequency G. M. P growth in take rate and what our strategy is the.
Eddie: The strategy that we're executing now is focused on increasing purchase frequency by increasing purchase frequency we will achieve.
Eddie: T M V growth.
Eddie: On the basis of that G. M D growth and once that has been achieved.
Eddie: Then we will be developing more advertising products that are highly optimized for SME.
Eddie: Merchants and at that point, we'll be able to leverage those new advertising products to achieve higher monetization.
Operator: Please note that the translation is for convenience purposes only. In the case of any discrepancy, our management statement in the original language will prevail. If you are unable to hear the Chinese translation, bilingual transcripts of this call will be available on our website within 7 working days after the Chinese New Year holiday.
Eddie: A clear strategy and a plan time wise in terms of how we're going to approach.
Eddie: Question.
Thank you.
Eddie: Our next question comes from Alicia Yap with Citigroup.
Alicia Yap: Please go ahead.
Alicia Yap: Hi, Thank you Glen you spent less on hospice, what they saw with actually what are what's your C. E O Joseph <unk> touch and <unk>, just what the league.
Operator: ???,???????,???????????,????????????????????,????????????,??????,???????????, ?????? ???????????,????????????????????????????????????? Operator, please connect the speaker and SI conference line now and start the Q&A session when ready. Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2.
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Ronald Kyung: If you're on a speakerphone, please pick up the handset to ask your question. To give more people the opportunity to ask questions, please keep yourself to no more than one question at a time. Your first question comes from Ronald Kyung with Goldman Sachs. Please go ahead.
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Ronald Kyung: Thank you Joe, Eddie, Fan, Toby, and Rob. I want to ask about the Taobao T-Mall take rate this quarter, which we just mentioned is like full and a blended take rate, and you mentioned the different factors, the makeshift but also the Taobao take rate increase. So I want to hear what is driving the take rate increase on this specifically, particularly on Taobao, how is the adoption of our sales-based kind of cost per sale-based shift in our ad tech upgrades, and just on the blend of this, then when should we expect take rates to stabilize, i.e. The GMV and CMR was like to stabilize at the same rate, and how should we think about the long-term take rate potential given that we're still much, much lower than global peers and, I would say, lower than quite a few of our Chinese peers, so the potential there is immediate and in the near term when to stabilize and long-term potential. Thank you. Take Crate, GMB, CMR, Shida, and rate it.
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Speaker Change: No go ahead, Neal yeah, just watching that.
Speaker Change: How many of my time go ahead, Joseph I took a little downtime, what I'll comment on forecasts in Shanghai.
Speaker Change: The woman. He also must keep watch just wanted to ask what you're seeing what's actually you also got to my job quasi women Shanghai jumped Yang.
Speaker Change: My two questions I'll go with that.
Speaker Change: Yeah.
Speaker Change: What question also relating to the strategy for the Taobao Tmall group I'm wondering if my understanding is correct and if you could confirm this for me.
Speaker Change: And my understanding where going forward focusing more on our light asset strategy for a T. T. G and that's the result of the light asset strategy. We can expect to see an increase in appetite is that correct.
Joseph C. Tsai: Yes, yes, Okay, thank you, Reynolds. I will take that. You know, for this quarter, actually, if you look at it, the overall take rate dropped a little bit, as I was explaining in my script. This job was because of the, As we can see, you know... Consumers', you know... Appetite for relative price competitive products has grown. So that's why we can see the GN shift from towards, so I just– Chow. Xi, Du, Wen, Zheng, Ti, Tan. This is mainly due to structural changes.
Speaker Change: And then.
Speaker Change: And my second question is I'd like to know what is the biggest difference that a T. T. G. A house in terms of its platform model when compared against other platforms are what's the biggest advantage that we offer to merchants with the way that we create more value for merchants.
Speaker Change: Other platforms do a we know that our short form video platforms have lots of organic traffic out there.
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Joseph C. Tsai: Corp. Kim Ho. This actually is a... We see the early success of the execution of our strategy because, you know, as we announced at the beginning of the year, the strategy for Taobao and Tmall is to use the... So we need to build our platform for all our consumers, particularly for price-competitive products. So that's why this demonstrates the early success of the execution of... Youssef Squali, Mark Mahaney, Ken Sena, Zachary Schwartzman, Alicia Yap, Alan Hellawell, Gregory Zhao, Robert Lin, Tina Lau, Evan Zhou, Mark Mahaney, Ken Sena, Eddie Leung, Chong Ming Chun, Kugelblitz, and Garth Wilson.
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Joseph C. Tsai: So for the siloed job of the takeaway overall... We are not too concerned. What we believe is, as I said... Just like what you said, you know, the overall takeaway is relatively lower compared with the other, which actually shows potential in terms of increase, provided, so enhancement. Operating efficiency on a platform as well as enable the merchants to increase their revenue, Youssef Squali, Mark Mahaney, Ken Sena, Zachary Schwartzman, Alicia Yap, Daniel Zhao, Robert Lin, Gregory Zhao, Alan Hellawell, Gregory Zhao, Mark Mahaney, Ken Sena, Eddie Leung, which will help us...... Chung Da. This shows that we still have a long way to go. Hung Hsien.
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Joseph C. Tsai: Zhou. Thank you. Thank you, everyone. Thank you. Thank you. .........................
Speaker Change: That's a little harder.
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Joseph C. Tsai: .. China. Thank you. Thank you, and many more.
Speaker Change: Yeah.
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Joseph C. Tsai: Thank you. Paul, That's a woman that, Our advertising products will be a great advantage for small and medium-sized businesses. At that stage, we will improve. TMV, The, Youssef Squali, Mark Mahaney, Ken Sena, Zachary Schwartzman, Alicia Yap, Alan Hellawell, Grace Chen, This is Eddie, I'd like to, and a lot of other people.
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Cynthia: Thank you. This is Eddie I'll I'll take that and I think I heard a couple of different questions in there if I understood correctly. The first question has to do with the revenue structure of the Taobao and Tmall group revenue.
Eddie: Revenue comprises two two parts really a CMI customer management revenue and.
Eddie: Then direct sales offering.
Joseph C. Tsai: And I think that's what we're all here for. And I think that's what Toby just said. We're talking on an overall strategic level about how we view the....... Thank you. Foucault.
Speaker Change: The way, we look at the business.
Eddie: The bulk of our revenue and profits should be contributed by CMS. The purpose of having a direct sales offerings.
Eddie: Firstly to retain customers to help drive increased purchase frequency and also to achieve a an advantage our competitive advantage in certain categories, but fundamentally our revenue and profits should be mostly contributed by our CMO secondly.
Joseph C. Tsai: Inc, on the basis that one has started, then we will. I'd be a little bit nervous about this one. I'm not nervous. I'm just excited to be here. I don't know what to say.
Eddie: In terms of how our Taobao Tmall group.
Eddie: It's different from its competitors.
Joseph C. Tsai: I don't, .......
Alicia Yap: Thank you. Your next question comes from Alicia Yap with Citigroup. Please go ahead. Hi, thank you, Guan Yichen. Good evening, thank you for accepting my question. I actually have a question related to the Taotian Group.
Eddie: I think from the merchant perspective, certainly a T T G I.
Eddie: Is the strongest platform with the most robust overall capabilities that it can offer merchants, we have a live streaming and other marketing modalities on top off it can help to quickly drive purchase volumes for our new product launches.
Alicia Yap: My understanding, please Guan Yichen, take a look at my understanding, is it right? That is to say, we feel that we already want to re-emphasize this model of a pro-asset platform. In this way, there will be a higher profit margin for Taotian Group's EVTA. Is this understanding correct? Another thing is that in this more intense competition environment, especially in this platform model, what is the biggest difference between the value that we can bring to the business and the value that other channels and platforms can bring to the business? And then on the user side, because like other short video platforms, they actually have a lot of natural flow of content.
Eddie: Very important for merchants are also are the day to day marketing operating tools that we offer and in fact, a lot of purchases of course are made via the search function on taobao.
Eddie:
Eddie: And.
Eddie: Of course, we also have a robust private domain tools as well that are stronger than all of the other competitors.
Eddie: Sofa for merchants of all of these different tools and services to make it possible for them to achieve very robust marketing and high efficiency operations.
Eddie: How about people group has the most comprehensive and full of set of capabilities in these respects.
Eddie: The other question as to how to retain customers and drive purchase frequency on the platform as I said in my opening remarks. This is really about precisely targeting the needs of different tiers of customers and ensuring that we have a good products good prices that we provide to them.
Eddie: Coupled with good services, because together that makes up the core experience for customers relative to E. Commerce. So that's how we're going to go about driving increased purchase frequency and growing.
Alicia Yap: That is to say, now they are quite successful in transferring this flow to their affordable e-commerce side. Do we have any plans to attract new users or attract old buyers back to our platform? Do you have any plans to share with us? Thank you, so related.
Speaker Change: Thank you the next question.
Speaker Change: Thank you. Your next question comes from Giles Hsiao with Barclays. Please go ahead.
Giles Hsiao: Thank you very much for taking my question.
Alicia Yap: I'm wondering if my understanding is correct, or if you can confirm this for me. In my understanding, we're going forward focusing more on light for and as a result of that light asset strategy. I think that's all. Thank you. Thank you. Um, and then, uh... My second question is, I'd like to know what the biggest difference is.
Giles Hsiao: I have a question about shareholder return, it's great you increased the buyback by 25 billion Hum.
Giles Hsiao: But in terms of the pace of the buyback we understand there are constraints and limitations such as catheter control could you talk about sort of the.
Alicia Yap: What's the biggest advantage that we offer to merchants? the way that we create more value. Video Plot, Goods. So how is TTG?
Joseph C. Tsai: ,,, Hobart, Uh, let me explain the two questions you asked. I remember you asked two questions. The first question is... In our income, in Taotie's income, there are two main components. Mark Mahaney, Ken Sena, Zachary Schwartzman, Eddie Leung, Gregory Zhao, Alan Hellawell, Gregory Zhao, Mark Mahaney, Ken Sena, Eddie Leung, Gregory Zhao, I think in terms of our commercial positioning, our main income and profits come from CMR. Overall, I think we are more concerned about our income and profits. Uh, about what you said, we are facing different competitors. On Taobao's platform, we have a fast-growing marketing tool similar to a live broadcast.
Speaker Change: Yeah. The cash you may already have.
Speaker Change: I'll also out of China, one need to happen.
Speaker Change: For us so you may be able to pick up the pace of the buyback and related to that.
Speaker Change: Any update on the potential ipos of friendship hope and tenure.
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Speaker Change: Okay. Thank you for your question I'll take the first one and Joe will take the second one and for the share buyback and the preparation of the offshore cash I think you know well firstly you know as you can see we have really have a very strong balance sheet in terms of cash and sit and potential.
Joseph C. Tsai: At the same time, we also have... For business owners, this is a very important day-to-day marketing and sales platform. It is a very important commodity e-commerce platform. At the same time, for businesses, there is another important platform, which is... In terms of pricing, it is the most comprehensive and complete service capability on the Taotien platform in terms of product marketing at various stages, including daily sales and how to manage its old customers.
Joseph C. Tsai: The cash actually is sitting offshore, which we can use to do the buyback.
Joseph C. Tsai: On the other hand, and we also have a good channel that we can you know.
Joseph C. Tsai: Dividend the cash out to offshore that we can further elaborate either to make investments in our offshore.
Joseph C. Tsai: The most important thing is how to accurately identify the consumer needs of so many users on our platform. In short, the e Jenna combined with some people hold down the Tom crowd bleep ok Trump won't let it... okay uh I don't know ah w- This is the core experience of e-commerce retail for consumers. We believe that by providing better products, better prices, and better services, This is Eddie.
Joseph C. Tsai: Businesses as well as using those that set of cash you do the buybacks.
Joseph C. Tsai: Toby with San Diego.
Speaker Change: So you go with your just great.
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Speaker Change: Yeah, Corey you watch your single friends, we go right.
Speaker Change: And secondly, actually we are sort of like very under leveraged if you look at our balance sheet actually the data.
Speaker Change: Only at that.
Speaker Change: A small amount of data and we can Tuesday, because if we needed. We can increase the leverage you know also to sort of look at a sufficient cash for us to do the share buyback. So as I said in my script, you know we're targeting to reduce.
Joseph C. Tsai: I'll take that, and I think I heard... and a couple of different questions. The first question had to do with the revenue structure. For Taobao and Tmall Group, revenue comprises two parts. CMR.
Speaker Change: We did have a net reduction of share count at least 3% every year in the next two to three three fiscal years.
Joseph C. Tsai: Direct Sales.,,, The way we look at the business, the bulk of our revenue and profit. Firstly, to retain customers, drive increased purchase and also to achieve an advantage, a competitive advantage, certain categories, but fundamentally, revenue and profits should be mostly contained. Bye.
Speaker Change: I didn't quite know how on a glimpse of the corn got new D. Yeah. This assortment of food.
Speaker Change: So we would of course she out what my colleague Twingo Tico are going down like what the controls with ascent.
Speaker Change: We go the more rules that came into fire, Andrew what's yonder or the movie all tissue side, yes, you're allowed to send you don't drill main yen she was in Chicago.
Joseph C. Tsai: Secondly, in terms of how Taobao Tmall grew, different from competitors, I think, from the merchant perspective, certainly is the strongest platform. Robust overall capabilities that it can offer merchants, we have Live streaming and other marketing modalities on Taobao that can help to quickly drive Purchase Volume, Product Launches, and very important for merchants also are the day-to-day marketing operating tools that we offer, and in fact, a lot of purchases, of course, via search. And Also, Of course, we also have a robust private domain tool, well stronger than all of them.
Speaker Change: Oh shoot 500 Sundance here you go.
Speaker Change: Sure.
Speaker Change: Okay I'll address the question about the IPO.
Speaker Change: <unk> come on in China.
Andrew: Yeah, So last year, when we announced a reorganization part of the goal.
Andrew: Was to make.
Andrew: To make sure that we take steps to reflect the intrinsic value of our various business units.
Andrew: In the valuation of Alibaba group.
Andrew: And we and there are multiple ways, we could do it and we specifically talked about spinning off companies.
Andrew: And raising capital in business units.
Andrew: <unk> come out and tiny al.
Andrew: So that we could put a valuation mark on these businesses.
Joseph C. Tsai: So for merchants, all of these different tools and services make it possible, very robust, and the most comprehensive. The other question as to how to retain customers and drive purchase frequency on the platform. As I said in my opening remarks, this is really a, precisely targeting the needs of different tiers. Good products at good prices that we provide, coupled with good service. Together, that makes up the core experience. Row.
Andrew: But the caveat when we made the announcement was that all of these transactions were subject to market conditions.
Andrew: And market conditions currently are.
Andrew: Just not in a.
Andrew: A state where we believe we can really truly reflect value.
Andrew: True intrinsic value of these businesses.
Andrew: So in the last few months.
Andrew: Eddie and his team have.
Andrew: <unk> taken a very close look at all of our core business and we've come to the conclusion that.
Andrew: You know right now focusing on generating synergies within the companies in our group will be the best way to reflect the value of.
Joseph C. Tsai: So that's how we're going to go about driving increased purchase frequency. Thank you. Thank you. Your next question comes from Jiong Shao with Barclays. Please go ahead.
Andrew: Of the entire Alibaba group.
Andrew: We're very excited about the potential for value creation through close collaboration among our businesses and.
Jiong Shao: Thank you very much for taking my question. I have a question about shareholder return. It's great you increased the buyback by $25 billion, but in terms of the pace of the buyback, we understand there are constraints and limitations such as capital control. Could you talk about some of the cash you may already have outside of China?
Andrew: Several areas, we have formed special project teams to ensure synergy creation.
Andrew: And we believe prioritizing synergies to strengthen our core business is the best value maximizing path today.
Andrew: Having said that we continue to explore value creation through separate financings of our business units, but given the challenging market conditions as I said, we're not in a hurry on the timing of these transactions.
Speaker Change: Oh, I wish Joe well I Oh.
Speaker Change: Great ice tea argument here that you're going to you all so much.
Speaker Change: Hi, Neil I'll take the IP or the shooting the Moon Junior woman shunt, who can some truths of truth with a yugo Mughal should shuang don't go inside she trying to coach.
Jiong Shao: What needs to happen for you so you may be able to pick up the pace of the buyback? And related to that, any update on the potential IPOs of FresherPoll and Tanya? Thank you very much.
Joseph C. Tsai: ,,,,, This time, the company increased the scale of the share repurchase plan. Youssef Squali, Mark Mahaney, Ken Sena, Zachary Schwartzman, Alicia Yap, Alan Hellawell, Gregory Zhao, Thomas Chong, Jerry Liu, Thomas Chong, Eddie Leung, Binnie Wong, Gregory Zhao, Alex Yao, Alibaba. My question is about the speed of the Moining, John Zucker, Robin Normal.dot Robin Microsoft Office Word Morse Word Microsoft, Can you talk a little bit about your company overseas? and many others.
Speaker Change: Could you shed tool-maker jaboomer ginger and the needs either you can attach a.
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Speaker Change: You are going to be we're sure if I'm off here holds Honeywell.
Speaker Change: As you all know how not just to create a yoga being shut out here you go.
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Speaker Change: That should Oh sure they'll find out what you should see them just sit home being shut you should show you shuffle tweeting crazy until should Shuja you should have all agenda.
Speaker Change: Sure sure Tom showed you on the she wishes Neil Panther. So that's what you should sort of caught my attention are finding true tissue.
Speaker Change: To a central that needs attention.
Speaker Change: Mike What you did see who you are talking to them about Eddie who is how does one how much should say sugar shun routes Cedar Chicago soy with a quick one.
Joseph C. Tsai: Thank you. Heidi, you're the, Okay, thank you for your question. I will take the first one, and Joe will take the second one.
Speaker Change: All sounds a woman she goes telling you the truth, Joe Diaz Fisher Salt Tweedle Sheetrock, Nate when you get what you tend to you cause shifts one to show you when they're going with a function that you go punting true yeah sure Tasha.
Speaker Change: How do you get a phone call.
Speaker Change: And in truth, Sheetrock, two ship with won't get with Central Vega.
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Speaker Change: To ensure we don't choose yet commit yourself, what's what we don't treat them, we see that when we show you.
Speaker Change: Sure Yeah, when they're going to be a different suite of holiday peak, Oh sure Sachin suite off whether somebody got a phone call dongsheng.
Joseph C. Tsai: For the share buyback and preparation of the offshore cash, I think, you know, for us, firstly, you know, as you can see, we really have a sort of very strong balance in terms of cash, and a certain percentage of that cash actually is sitting offshore, which we can use to do the buyback. You know, on the other hand, we also have this is a good channel that we can, you know, dividend the cash out to offshore, that we can further leverage either to make investments in our offshore businesses, as well as using that sort of cash to do the buyback. Uh, this is, uh, Uh, Youssef Squali, Mark Mahaney, Ken Sena, Zachary Schwartzman, Alicia Yap, Alan Hellawell, Grace Chen, Piyush Mubayi, Jiong Shao, Robert Lin, Jerry Liu, Thomas Chung, Gregory Zhao, Alibaba Qin Wan. Thank you. Secondly, actually, we are sort of like very underleveraged. If you look at a balance sheet, actually, the data is only a very small amount of data.
Speaker Change: Well Ah Hi, Cory, Yeah, hi, weight tissue shoe country called you put one year with us.
Speaker Change: And with her and show them that way.
Speaker Change: Drew quite cheap.
Speaker Change: Next question.
Speaker Change: Thank you. Your next question comes from Kenneth Fong with UBS. Please go ahead.
Kenneth Fong: Hi, Good evening management things.
Kenneth Fong: For taking my question I have a question on the investment and return.
Kenneth Fong: Got it all on one hand, we will continue to invest in TPG overseas area for.
Kenneth Fong: But on the other hand in our last earnings call. We also aim to improve to all I see for the group from single digit to double digit over time. So I wanted to ask about let's say on the numerator of funds are what are the settlement that we see room for improvement in terms of return and at the pace that we should expect and all that.
Speaker Change: Do you hear me sorry.
Being asset light what are the progress and strategy for the disposal of noncore assets. Thank you.
Official: Yeah, Glenn it's official or that he would Uh huh.
Official: What does he she or he told you we bought the when he will.
Official: Women should all see trying to tissues.
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Official: You want shoot some chalk AR 10, pushing our EMEA.
Joseph C. Tsai: And we can, if we need it, you know, we can increase the leverage, you know, also to sort of get sufficient cash for us to do the share buying. So, as I said in my script, we're targeting to reduce, to have a net reduction of at least 3% every year in the next three fiscal years. , in the next three years, we will achieve this goal every year. Okay, I'll address the question about the IPO of Hema and China. So last year when we announced our reorganization, part of the goal was to make sure that we take steps to reflect the intrinsic value of our various businesses in the valuation of them. And there are multiple ways we could do it. And we specifically talked about spinning off companies and raising capital in businesses like Kerma and Chai Niao so that we could put a valuation mark on these businesses. But the caveat when we made the announcement was that all these transactions were subject to marketing.
Official: Tito shrunk so that it took a year to different where you don't get me wrong and so I'm sure Schoenthal. We some phone final thought through them, we bought a true booties shouldn't the young we should see on your go sweeping now at what sounds should all are just deciding to US yeah, yeah, well you remember when we create Hugo tickets have been revalued.
Official: Angela do you got a pseudo hoods, yet so light.
Speaker Change: Yeah, Oh are going to go somewhere I'm not too sure sure.
Speaker Change: So to show off to you a few clicks you can switch on to your Formula. So we seem to get seen John Grupo T y.
Speaker Change: Thank you Candice I would take the first part of your question.
Speaker Change: As we said I think it you know as as set.
As a company I think is important to include all I see to the investors. So that's why during the last quarter's earnings call. We committed that will improve our hour I see from one.
Speaker Change: A single digit to double digit in the next couple of years.
Speaker Change: So tobi with sound Cuidado. He started to go into your so we shall sure going through when their own way to see all shown a torturous chunk, who don't see I'm sure true.
Speaker Change: To go harder tickets and then we bought a insulet woman has shrunk. She too you should think of going forward or milkweed juku that box has been three volume some tick down we should T got too.
Speaker Change: Sure.
Speaker Change: However, the improved E.
Speaker Change: Our improvement on the allies, he doesn't conflict with the investment we're going to make because making investment exactly is for the quality and for the future retired off these growth eventually will also help to improve that.
Joseph C. Tsai: And market conditions currently are, just not in a place where we believe we can really truly reflect value. The True Intrinsic Value of These Businesses. So, in the last few months... Eddie and his team have taken a very close look at our core business, and we've come to the conclusion that, right now, focusing on generating synergies within the companies in our group would be the best way to reflect the value of the entire Alibaba. We're very excited about the potential for value creation through close collaboration among our partners. In several areas, we have formed special project teams to ensure synergy, and we believe prioritizing synergies to strengthen our core is the best value-maximizing path today. Having said that, we continue to explore value creation through separate finances. But given the challenging market conditions, as I said, we're not in a hurry on the timing, Show. That's it.
Speaker Change: But that's you know.
Speaker Change: Tricia T called ROIC seats of them who've already.
Speaker Change: Sure well Misknow Drumbeats, what did he say towards being Gamal dwindle down to it being the Oregon, where they're trying to do them and timken switch with you said towards the yeah. Just some whaler dialogue related so I'm talking about you all know we've added some jong cheon juki check all of them.
Speaker Change: What we would be doing differently for them from previously is that we would be more focused on the core businesses as elaborated previously by Eddie.
Speaker Change: So we will focus on only to e-commerce, which is including the onshore and offshore you know.
Speaker Change: E Commerce business as well as cloud computing.
Speaker Change: So those are the areas as I emphasized in my script, a rulemaking lessons.
Speaker Change: But what we're going to shoot to the sweetheart of Bhutan.
Speaker Change: Just a short or mcquay, our tried and true woman who's he knew what he said towards the contact Eddie Yeah sure Ming showed a chart at all.
Joseph C. Tsai: Thank you. Yoda, Last year, we announced the restructuring of our company. One of the goals of the restructuring is...,,,, and others. Thank you. Good. Uh, that's it. ,,, At that time, we also made it very clear that whether these transactions were promoted or not, how they were promoted, depended on market conditions. Hsien Loong. You., Tsai. Sunroots Cedar, himself.
Speaker Change: No pushing your woman trumpets, what holds true. We are you go through that you are showing your Aqua C neighborhood seen wider ghansham geography means he's fun contact was that what if I Angela you should talk to your question, Yes, sure I'm afraid shout out towards the 20th.
Speaker Change: Okay, and Joe Joe will cover the seven you can see it from some of them call It sound investments.
Angela: Funny, you should feel since the time of the tweet thru tubing to your watch all get short language that yeah, I'll talk about the sale of non core assets. Since this is a major focus of the capital Management Committee and I Chair the capital Management Committee, we're making very good progress on noncore asset sales.
So during our fiscal 'twenty four to date, though we're nine months into this fiscal year.
Angela: The exited one 7 billion in noncore investments.
Angela: Right.
Angela: And so that's a pretty good pace and.
Angela: We're very very active in looking at our listed securities and we form a special team.
Angela: To execute.
Angela: Execute capital markets sale transactions to get out of these listed securities.
Angela: Now in addition.
Angela: Toby has referred to this.
We have a number of traditional physical retail businesses on our balance sheet.
Angela: And these are not our core focus.
Angela: It would make us and it makes sense for us to exit these businesses.
Joseph C. Tsai: , Chow. Now we have established some special teams in China. Thank you. Thank you. And, of course, we can and will continue to... Sina Weibo, etc., both belong to Chinese documents.
Angela: But this will take time, given the challenging market conditions, but we'll continue to work on it.
Angela: Although the mcguane using a few who seem to have the two go truthful when T E.
Angela: You made to us wanting to.
Angela: But anyway, you won't quit tied to tune their homes, while our work shoot anyway, you agree that we see the G formula of English would seem drunk featuring the schwinn woman say, our suite tiny N a too good.
Angela: <unk> seen the strategic sugar, yet Oh, yeah, well me eating our lunch on Twitch Fula should see he may end up to just a few questions. So I took a pseudo English supposed you've hit on Florida.
Kenneth Fong: Hui, all of your questions. Next question. Thank you. Your next question comes from Kenneth Fong with UBS. Please go ahead.
Angela: Tuition or me if you don't see the side can you ship to sure sure sure.
Angela: Sure.
Kenneth Fong: Hi, good evening, management. Thanks for taking my question. I have a question on investment and return. On the one hand, we continue to invest in TTG's overseas areas for growth. But on the other hand, in our last earnings call, we also aim to improve the ROIC for the group from single digit to double digit over time. So I want to ask about, let's say, on the numerator front, what are the segments that we see room for improvement in terms of return and then the pace that we should expect. And on the denominator side, being asset light, what is the progress and strategy for the disposal of non-core assets? Thank you.
Angela: We truly amazing Cholula treadmill, there you go.
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Speaker Change: Yeah, Yeah, we should.
Speaker Change: Uh huh.
Speaker Change: I'm sure you saw that no matter, who wouldn't it goes from Tcl.
Speaker Change: Once on Twitch food Opana, yes, you've hit on really the tickets Wifi that should you go kind of wish you should get your colleague function does should have a single kind of wish you all ships, Yeah My mother ship.
Speaker Change: Next question.
Speaker Change: Thank you. Your next question comes from Alex Yao with JP Morgan. Please go ahead.
Thank you management for taking my question I have a couple of questions.
Kenneth Fong: My question is about investment and returns. We know that the group will continue to grow in the Taotian Group. I want to find a way to gradually raise the return rate of capital to a level of two-digits.
Alex Yao: The value return to shareholder in this chance so first of all.
Alex Yao: You guys cant say.
Kenneth Fong: I want to know which businesses you think can increase the return rate of capital and at what kind of speed and rhythm to achieve it. And then the latest progress on the sale of non-core assets. What other plans do you have? Thank you, Kenneth.
Alex Yao: 35 points 3 billion U S dollar available in the buyback program, which reached roughly 12 billion per fiscal year.
Alex Yao: Due to the.
Alex Yao: 2023 calendar year buyback.
Joseph C. Tsai: I'll take the first part of your question. As we said, I think it, you know, as... I think it's important to improve the RIC for investors, so that's why, during the last quarter earnings call, we committed that we would improve our RIC from a single digit to double digit in the next couple of years. Tobi, I will answer this question first.
Alex Yao: Buyback pace this is sizable.
A step up.
Alex Yao: Yeah.
Alex Yao: You guys have to.
Alex Yao: Real serious intention to step up the buybacks will put another way how do you determine the 12 billion buyback.
Alex Yao: The right number to think about it holistically.
Joseph C. Tsai: Yes, as a listed company, we think that we need to show investors and shareholders that there is a good capital return. Therefore, we also announced last quarter that we would, The number of units increased to two units. However, the improvement in the ROIC doesn't conflict with the investment we are going to make, because making an investment is exactly for growth, and the future return of this growth eventually will also help to improve the ROIC. The two sides are not at odds. There is no conflict between the two parties.
The buyback and dividends together and call it a huge too.
Speaker Change: Shareholders or do you have a target yields for the next couple of years. Thank you.
Speaker Change: Oh sure sure Glenn itself, well with tissue quite you go through just the Docklands yatzik equaled the window to see it going forward.
Speaker Change: No.
Speaker Change: Sounds like you're going to you're watching quote Greenwood shoutout Horner cause I could you'll nutrisystem quick or to go to shoot a soundbite wishes sentiment you're on.
Speaker Change: Uh huh.
Speaker Change: Should candlemaker tiny channel they called it Ohio, you got signed yet so should you buy Archer eats Toyota are familiar.
Speaker Change: There's some be a earning our sanya linear in two of the agenda a bigger go Mike we want to touch it.
Joseph C. Tsai: Because the investments we have made today are to bring about future growth. With future growth, we can naturally improve. What we will be doing differently from before is that we will be more focused on the core businesses as elaborated previously by Eddie. So we will focus on only e-commerce, which includes the onshore and offshore, you know, e-commerce business as well as cloud computing. So those are the areas where I was emphasizing my script rulemaking.
Speaker Change: Sure.
Speaker Change: What's the window human gender shoes in terms of the monuments industry or does it go to each wheel jumbo fasting blood Chalmette, youre seeing who couldn't wait for.
Speaker Change: Sure.
Speaker Change: I went to Union you probably are familiar with so much at all just heard Chung show that somebody Hugo I'll shoot the moon anymore, I don't find a buyer, who frankly ego cooked chicken if I could see through fun home until Youngstown as I eat you Muslim wage Xinjiang creagh equal dilation younger two goes to show you. Your meal you can move out actually.
Joseph C. Tsai: The biggest difference from the past is that we will focus on our core business to make these investments. As Eddie said very clearly, the core business that we are going to invest in is our e-commerce business. The second is cloud computing. In my speech, I also mentioned that we would increase investment in these core businesses. Joe will cover the server, as you said, from some of the non-core add-ons in that.
Speaker Change: Okay. Thank you Alex for the question I think is Chavez young say, it's yes, we're serious of course you know.
Alex Yao: If you look at back at all of our track record we have being you know in the past a few yes, we have.
Alex Yao: Dan on few upsides as off the share buyback program. So if you look at that as sort of like track record, where actually you know if he liked it instead of like a exceeded the original.
Joseph C. Tsai: Yeah, I'll talk about the sale of non-core assets since this is a major focus of the Capital Management Committee, and I chair the Capital Management Committee. We're making very good progress on non-core asset sales. So during fiscal 24 to date, so we're nine months into this fiscal year, we have exited $1.7 billion in non-core investments. All right. And so that's a pretty good page. And we're very, very active in looking at our listed securities, and we form a special team to execute capital markets transactions to get out of these listed securities. Now, in addition, Toby has referred to this.
Timetable if you like so that's why we the board approved another upsize at this time. So that's why you know as I said we are serious.
Alex Yao: But how do you go with us.
Alex Yao: I'm not sure to go down should continue though on what conditions. If at all are going to trend young suitor.
Alex Yao: It's usually you kind of look what you'd seen yonder to go cool cool.
Speaker Change: Oh sure no woman just.
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Speaker Change: T neighborhood chatbot anymore.
Speaker Change: So in terms, how we decided this number of course, we need to take a few factors into consideration, including our cash generating capability and also you know how much cash we do we would be able to sort of like January at all.
Joseph C. Tsai: We have a number of traditional physical retail businesses on our balance sheet, and these are not our core focus. It would make sense for us to exit these businesses, but this will take time given the challenging market conditions, but we'll continue to work. Okay, so regarding the sale of non-core assets, let me answer this question, because this is... I am a member of the Capital Management Committee, and in this aspect, we should say that the progress is very smooth.
To look at it as the offshore so all these we consider it and of course as I said previously that that leverage leveraging capability. We have so that together I think a week, we consider a $12 billion is the right number around the right number for us to do the buyback.
Speaker Change: No I'm not sure.
Speaker Change: Throughput should Oh, what does she was a real good chicken and saw chairman Vega shoots with Greenwald signal.
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Joseph C. Tsai: We are in the second quarter of the financial year. In the last nine months, we have withdrawn $1.7 billion in non-core investments. So this pace is very good.
Speaker Change: The bulk of what we're gonna say he thought that this was one particular time.
Speaker Change: Guncotton Hood, she tried to take a shaping.
Speaker Change: I don't know, but soon could we see a <unk> woman real wages are Dr guys or ebay or she made I mean, yeah.
Speaker Change: Great.
Speaker Change: Sure sure.
Speaker Change: So in addition to the buyback you know.
Speaker Change: For this upsized the 25 billion that's the only for the buyback as we announced in the last quarter, we start to pay a and your dividend. So if you like for for that fiscal year, 'twenty, three including the buyback of $9 8 billion and $2 5 billion dividend actually we're giving back and more than 12 billion.
Joseph C. Tsai: At the same time, we are also very actively looking at some...? We've already set up a team to implement the stock market. We've already set up a team to implement this stock market market, and I'm going to talk a little bit about the market. So let's start with the first question. The question is, what is the most important business in China? Youssef Squali, Mark Mahaney, Ken Sena, Zachary Schwartzman, Eddie Leung, Binnie Wong, Gregory Zhao, Alex Yao, Thomas Chong, Jerry Liu, Evan Zhou, Mark Mahaney, Tina Lau, Next question.
In U S dollar back to the shareholders and you know going forward. We are expecting you know Ah Ah Ah.
Speaker Change: Continue with our cash generating capability will continue to deliver to give back to shareholders.
Speaker Change: The cash.
Speaker Change: As we can as we sort of like a committed.
Speaker Change: My true love for them to go for a week or two I ought to tissue number I wish it eat chicken seems intriguing can you go into a truth centralized Shaanxi to EMEA shinbu, telling where you are in yen to the physical no matter to.
Speaker Change: Our son Pine, Yeah are you know kind of a tick up from what he calls shouldn't you should buy Shashank took a fun hoelscher our shoe.
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Alex Yao: Thank you. Your next question comes from Alex Yao with J.P. Morgan. Please go ahead.
Speaker Change: Yeah, I'd, just like to supplement what Tobi said I'll do it a little bit math.
Alex Yao: Thank you very much for taking my question. I have a couple of questions on the value return to shareholder initiatives. So first of all, you guys currently have $35.3 billion U.S. dollars available in the buyback program, which averaged roughly $12 billion per fiscal year compared to the 2023 calendar year buyback pace. This is a sizable step up.
Speaker Change: On this question.
Speaker Change: Yeah.
Toby has said in his prepared remarks that we are targeting.
Speaker Change: A 3% three percentage points per year of accretion.
Speaker Change: Per year over the next three years through our buyback program.
Speaker Change: And that commitment is pretty real because if you look at the past 12 months, we actually reduced our share count by three 3%.
Alex Yao: Do you guys have the real serious intention to step up the buyback? Or put another way, how do you determine that $12 billion buyback per year is the right number to think about? And then, holistically, if we add the buyback and dividend together and call it a yield to shareholders, do you have a target yield for the next couple of years? Thank you.
Speaker Change: So that that accretion.
Speaker Change: Is.
Speaker Change: You know, we believe is achievable and if you look at our share count was about $2 5 billion shares outstanding and 3% is 75 million shares.
Alex Yao: My question is about the company's return value to shareholders. Now, after the expansion of the share purchase plan, the amount of money that can be used to carry out the purchase is $35.3 billion. So, I would like to ask, are you really serious?
Speaker Change: If we are deploying $12 billion, a year or to buy back our stock.
Speaker Change: At the current stock price, we actually would be able to buy back even more but of course dissipating that our stock.
Speaker Change: Oh, well increase in price over the last three years Oh over the next three years, so that we can.
Joseph C. Tsai: Do you really have the intention to spend so much money to carry out the share repurchase? Or, put another way, how do we know that $1.2 billion is the correct investment for a year? Thank you, Alex, for this question. I think the short answer is yes, we are serious. Of course.
Speaker Change: No.
Speaker Change: We could still keep it keep our target of 3% accretion per year. So so using the $12 billion a year of buyback with rising stock price are I think it is still reasonable to to get to a 3% accretion a year. So that's that's a.
Joseph C. Tsai: If you look at our track record, we have, you know, in the past few years, we have, you know, done a few upsizes of the Shared By Effect program. So if you look at it, sort of like our track record, we have actually, you know, if you like, exceeded the original timetable, if you like. So that's why we, the board, approved another upsize this time. So that's why, you know, as I said, we are serious. To put it simply, the answer is yes, we are very serious. You can look at our past performance in the past few years.
Speaker Change: Math number one math number two is.
Speaker Change: Uh huh.
Speaker Change: 3% accretion a year plus a dividend of $1 per a D S.
Speaker Change: Dividend yield is about one 4% and it's so combined with the buyback accretion and a dividend yield youre looking at.
Speaker Change: You know about 4.445%.
Speaker Change: Which is actually.
Speaker Change: Quite close to the 10 year Treasury yield. So if you buy Alibaba stock, it's like you've bought a 10 year Treasury bond with the upside of our stock price appreciation.
Joseph C. Tsai: So in terms of how we decide this number, of course, we need to take a few factors into consideration, including our cash generating capability and also, you know, how much cash we will be able to sort of generate to get it offshore. So all these we consider, and of course, as I said previously, the leveraging capability we have. So together, I think we consider 12 billion the right number, around the right number for us to do the buyback. How did we decide to proceed according to such a digital scale?
Speaker Change: So that's the math we're looking at.
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Joseph C. Tsai: Of course, we considered many different factors, including our ability to generate cash, including how much cash we have abroad, including the level of our financial leverage and debt collection, and so on. The total is approximately US$1.2 billion per year, which is a very reasonable amount. US$1.2 billion back to the shareholders. And going forward, we are expecting to continue with our cash-generating capability, continue to deliver, and give back to shareholders the cash as we come as we sort of like come in. So, in addition to our share repurchase, this is 250 billion. This is only for share repurchase.
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Speaker Change: No matter chigger shoots a feet on she had seen you make one shinhan she called China to show you what my Alibaba Group shot. She could you know shall show adult who make war Shunyata kwacha Shandong to telling you guys show your tongue shouldn't you had Chris I'll show it all whaler trigger Josh Orange on the ticket.
Joseph C. Tsai: In addition, we also announced that there would be annual dividends in the last quarter. So, for the second and third financial years, the share repurchase is 9.8 billion, plus the dividend is 2.5 billion dollars, which is more than 1.2 billion for our shareholders, and considering our ability to generate cash in the future, we are looking forward to continuing to give to our shareholders. Yeah, I just want to supplement what Toby said.
Speaker Change: Yeah.
Speaker Change: Next question.
Speaker Change: Thank you. Your next question comes from Gary Yu with Morgan Stanley. Please go ahead.
Gary Yu: Hi, Thank you for the opportunity.
Gary Yu:
Gary Yu: I have a question for John.
Gary Yu: National business.
Joseph C. Tsai: I'll do a little bit of math on this question. Toby has said in his prepared remarks that we are targeting 3%, three percentage points per year of accretion, of the year over the next three years through our buyback program. And that commitment is pretty real because if you look at the past 12 months, we actually reduced our share count by 3.3%. So that accretion is.
Gary Yu: Just wanted to see if there is a need to know about.
Speaker Change: We are focusing on adding.
Speaker Change: I wanted to ask all our strategy in the U S.
Speaker Change: For the ecommerce business.
Speaker Change: So hats off election.
Speaker Change: We also talked about potentially stepping up in the backlog.
Joseph C. Tsai: You know, we believe it's achievable. And if you look at our share count, we've got 2.5 billion shares outstanding, and 3% is 75 million shares. Um, if we are deploying $12 billion a year to buy back our stock, at the current stock price, we would actually be able to buy back even more. But of course, anticipating that our stock will increase in price over the last three years and the next three years, so that we can... You know. We could still keep our target of 3% accretion per acre.
How should we look at the level that we lost.
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Speaker Change: Did you find anything at the C level.
Speaker Change: Are you going to tap into more of a theory all show up on a couple of other key objectives.
Speaker Change: Thank you.
Gary Yu: Okay Gary.
Speaker Change: Because they're your background is quite noisy can you repeat a few questions.
Speaker Change: Okay.
Speaker Change: Okay.
Gary Yu: Hi can you hear me better.
Speaker Change: Yes. Please go ahead.
Okay I apologize for that.
Joseph C. Tsai: So using the $12 billion a year of buyback with rising stock prices, I think it is still reasonable to get to 3% accretion a year. Math number one. Math number two is.
Speaker Change: In the middle of a Chinese new year.
Speaker Change: So my question weak loading.
Speaker Change: National business.
Speaker Change: And our first one is and get them. Okay in terms of market for the next couple of quarters and specifically what is our strategy in the U S market given the geopolitical risks.
Joseph C. Tsai: You know, 3% accretion a year plus a dividend of $1 per ADS, the dividend yield is about 1.4%. And so combined with the buyback accretion and the dividend yield, you're looking at... You know, about 4.4, 4.5%, which is actually quite close to the 10-year Treasury yield. So if you buy Alibaba stock, it's like you bought a 10-year Treasury bond with the upside of stock price appreciation. So that's the math we're learning. Mr. Zhou, I'd like to add something. We can calculate some numbers. Mr. Tobi just mentioned that our goal is to, and this will lead to a corresponding increase in the stock price. This is what will actually happen.
Speaker Change: That's it.
Speaker Change: And the second question also on International is our we talk about stepping up at Beckman.
Speaker Change: How should we look at the segment loss in the coming quarters, and how are we going to funding investment between.
Speaker Change: Individual financing that the AI D. C level person is tapping into that group of show up on anything.
Speaker Change: At the group level. Thank you.
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Joseph C. Tsai: We can see that in the past year, we have brought about a 3.3% change. Now that we are out of circulation, the share of Liutong Group is 2.5 billion, so 3% means 75 million shares.
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Speaker Change: But shouldn't you don't Sudhakar wash off wishes from few times home yet channel are taken one for the team.
Joseph C. Tsai: But we definitely think that in the next three years, our stock price will definitely rise. So if we continue to follow this 3%, which is $1.2 billion a year, I think this is very reasonable, even when considering the stock price. Well, regarding the question about the bias, we can separate the two. Swartzman. Swartzman.
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Gary Yu: Youssef Squali, Mark Mahaney, Ken Sena, Zachary Schwartzman, Eddie Leung, Gregory Zhao, Next question. Thank you. Your next question comes from Gary Yu with Morgan Stanley. Please go ahead.
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Gary Yu: Hi, thank you for the opportunity to ask questions. I have a question for Jiang Dan on international business. Just wanted to see if there are any kind of particular markets that we are focusing on. And specifically, I want to ask about our strategy in the US regarding cross-border e-commerce business, given the geopolitical race ahead of elections. And we also talk about potentially stepping up the investment in international business. How should we look at the level of spending loss in cross-border?
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Speaker Change: So this is John fan and I'll take the first part of your question are we can we can break this out and look at the business in terms of cross border versus a local so in terms of the local business over the past several quarters, we've seen very rapid improvement in efficiency and a rapid narrowing.
Gary Yu: And how are we going to fund the investment through more individual financing at the AIDC level? Or are we going to tap into more of the kind of offshore financing capability at the business level? Thank you. Gary, your background is quite noisy.
Speaker Change: Of of losses, and we expect that to continue.
Speaker Change: The cross border business of course addresses all markets everywhere, it's a generic business model.
Speaker Change: And so in determining how.
Speaker Change: How we will allocate a investments going forward basically we look at our return on investment we look at the efficiency of the investments we've made to plan our future investments.
Gary Yu: Can you repeat a few questions? All. Hi, can you hear me better?
Speaker Change: In terms of the U S. A we actually do have a business foundation there too.
Gary Yu: Yeah, please, go ahead. Okay, I apologize for that. I'm in the middle of a Chinese New Year dinner, so my question concerns international business. And the first one is, any particular focus in terms of markets for the next couple of quarters? And specifically, what is our strategy in the US market, given the geopolitical risk ahead of elections? And the second question, also on international business, is: we talked about stepping up the investment. How should we look at the segment loss in the coming quarters? And how are we going to fund the investment between individual financing at the AIDC level versus tapping into group offshore financing at the group level? Thank you. Thank you.
Speaker Change: To see them to be on Alibaba Dot com in fact lots of customers are U S. Customers. So we certainly attach importance to the U S market and we will evaluate.
Speaker Change: Whether we will be increasing our investment in the U S. On the basis I described looking at the value that we can bring the innovation that we can bring and.
Speaker Change: Of course in that process, we will also take into consider the various risks that you've outlined.
Speaker Change: I would take on a second question basically you're asking how we are going to arrange the financing for a I D. C. You know.
To get a sufficient funding for investments so generally as actually and Joe was explaining previously.
Speaker Change: D. C is it going to do financing. However, we are in a rush to do a financing so really depending on the market conditions, we will find the right moment to do a financing so before that more money is coming actually what we will be doing is as I said, we have sufficient offshore cash we can use.
Speaker Change: Those cash to finance debt.
Gary Yu: My question is about our international business. First, I would like to know, in the next few quarters, what areas of the market will be the focus of our main development, and what is your strategy in the United States? Now is the election season.
Speaker Change: Finance that sort of growth all businesses all fuel.
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Jiong Shao: The second question is about how much of your future investment will be financed by AIDC and how much will be from the group level. Okay, let me answer the first question. First of all, I'd like to say that we also share this.
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Speaker Change: Thank you the next question.
Speaker Change: Thank you. Your next question comes from Thomas Chong with Jefferies. Please go ahead.
Jiong Shao: There will be a cycle based on the performance of our investment efficiency, and then we will evaluate our investment in different markets. Back to the US, we also have a certain business foundation in the US. Whether it is our 2C business or our 2B business, Alibaba International Station actually has a large number of customers from the US.
Thomas Chong: Hi, Good evening, Thanks management for taking my question.
Thomas Chong: Question on the cloud side.
Thomas Chong: And he is now leading our PPG and what should we expect in terms of the synergies in coming quarters.
Thomas Chong: And should we expect AI to be at five P.
Jiong Shao: The US is also a market that we value very much. We will evaluate whether we need to increase our investment in the US market based on the value and service provided by the US and some innovative ways. Yes, of course, the geopolitical risks you just mentioned are also a problem that we will consider. This is all I have for this question.
Thomas Chong: CMO.
Speaker Change: That's one.
We have a very good margin profile in the December quarter.
Speaker Change: Any color about the long term margin assumption that we should.
Speaker Change: Thank you.
Jiong Shao: So, this is Jiang Fan, and I'll take the first part of your question, and we can break this out and look at the business in terms of cross-border versus local. So, in terms of the local business, over the past several quarters, we've seen very rapid improvement in efficiency and rapid narrowing of losses. We expect that to continue. The cross-border business, of course, addresses all markets everywhere.
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Jiong Shao: It's a generic business model. And so, in determining how we will allocate investments going forward, basically, we look at return on investment. We look at the efficiency of the investments we've made to plan our future investments. In terms of the U.S., we actually do have a Business Foundation there, 2C and 2B.
Speaker Change: Yeah.
Speaker Change: Do you know what Michelle Zhang.
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Jiong Shao: On Alibaba.com, in fact, lots of customers are U.S. customers, so we certainly attach importance to the U.S. market, and we will evaluate whether we will be increasing our investment in the U.S. on the basis I described, looking at the value that we can bring, the innovation that we can bring. Of course, in that process, we will also take into consideration the various risks that you've outlined. I would take on a second question. Basically, you're asking how we are going to arrange the financing for AIDC to get sufficient funding for its investment. So generally, as Joe was explaining previously, you know, AIDC is going to do financing. However, we are not rushed to do financing.
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Speaker Change #102: We like the social phone call tempting. Please jose.
Speaker Change: Uh huh.
Speaker Change: The bundle, depending when they send their husbands in Sweden.
Speaker Change: That's all together.
Speaker Change #100: Thank you and that's a really great question.
Joseph C. Tsai: So really, depending on the market conditions, we will find the right moment to do the financing. So before that moment is coming, actually, what we will be doing is, as I said, we have sufficient offshore cash. We can use that cash to finance the business, you know, finance the sort of growth of our businesses. Hello, I'm Toby.
Speaker Change #100:
Speaker Change #100: Certainly I see very strong potential for greater synergy between Alibaba cloud and the Taobao Tmall group, especially driven by AI.
Speaker Change #100: As as you know we've been.
Speaker Change #100: In developing our own large language model called <unk>.
Speaker Change #100: And we're currently testing ways to leverage the <unk>.
Speaker Change #100: Model to leverage the AI capabilities too.
Speaker Change #100: To enhance our search and to enhance our advertising as well. This initiative is still in the early testing phase, but we see very strong potential to leverage AI to significantly enhance search conversion and our AD monetization. So as I say that's still in early test.
Joseph C. Tsai: I'm here to answer the second question, which is about how we arrange the funds needed to invest in AIDC. As Joseph said, AIDC will seek foreign financing at a certain time, but we are not in a hurry.
Speaker Change #100: But we see excellent potential there.
Speaker Change #101: Next question please.
Speaker Change #101: Thank you. Your next question comes from Ellie Jang with Macquarie. Please go ahead.
Joseph C. Tsai: It depends on the market conditions to find the right time. Thank you. Next question. Thank you. Your next question comes from Thomas Chong with Jeffreys. Please go ahead. Hi, good evening. Thanks, management, for taking my questions. I have a question on the cloud side.
Ellie Jang: Thank you so much marathon for taking my question I just have a follow up question on that.
Ellie Jang: D C international units.
The earliest shed some exciting bottleneck.
Ellie Jang: She's market.
Speaker Change #104: But it seems like this quarter.
Thomas Chong: Given that Eddie is now leading a TTG in the cloud, what should we expect in terms of the synergies in the coming quarters? And should we expect AI to be a driver for CML? And on that front, given we had a very good margin profile in the December quarter, any color about the long-term margin assumption that we should expect? Thank you. My question is about Alibaba. Now, Eddie is directly in charge of the two businesses, Taotian Group and Alibaba.
Speaker Change #104: National unit basically saw very big why Didnt lost around.
Speaker Change #104: Around $3 billion I E.
Speaker Change #105: So just wondering how.
Speaker Change #105: How do we anticipate investment pace, Oh boy, considering starting a key growing market such as unexpressed choice at the hybrid model as well.
Speaker Change #105: Now seems to be still in the early development stage.
Speaker Change #106: So okay.
Thomas Chong: Do you think Alibaba will be in charge of Taotian Group? Today, we can see that there are more synergistic effects between these two groups. Will AI drive the growth of CMR? In the December quarter, we saw some good results.
Speaker Change #106: Going forward, how do we really evaluate the economy as well as the competitive.
Speaker Change #107: Thank you.
Speaker Change #107: Yeah.
Speaker Change #107: So it was oh shoot to AI D C light he wouldn't.
Speaker Change #107: Quite granted social it's yes, all our handler.
Speaker Change #107: It seemed like it gets hold true through AI T C. A T P M.
Speaker Change #107: That's just kind of on the IDC there too.
Thomas Chong: I would like to know what the long-term profits will be. Thank you. Your question is very good. Day, In terms of Aliyun and Taotian, there are great potentials, especially in terms of AI. Ali will be developing another Spanish version...
This one has your core that should essentially E P.
Speaker Change #107: So we songs sound shoot automobile I told city because.
Speaker Change #107: Yeah, So Tycho Cui should so you know that women should all tigger aliexpress choice to casino Oklahoma.
Joseph C. Tsai: There are tens of millions of models, and on this basis, we have seen a lot in our search and advertising. We did some research and tests on these businesses, and we found that there is still a lot of room for improvement to increase the conversion rate, match the ads, and make them more efficient. But we are still in the early stages of product research and testing. We believe that this part of the research and investment in AI will be very helpful for future search and advertising products of Tao Tian. But we are still in the early stages of product development. Thank you, and that's a really great question. Certainly, I see very strong potential for greater synergy between Alibaba and the Taobao T-mall group, especially driven by AI. As you know, we've been developing our own large language model called Tongyi Qianwen.
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Speaker Change #108: Yeah sure Chris that you're good.
Speaker Change #108: All of them with either poor would show him on Karnataka.
Speaker Change #108: So instead of trying to model the Oh, Yeah, then who don't win on the beaches.
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Joseph C. Tsai: And we're currently testing ways to leverage it for advertising. This initiative is still in the early testing phase, but we see very strong potential to leverage AI to significantly enhance search conversion and add monetization.
Speaker Change #108: How do you go with that.
Speaker Change #108: So that's pretty well known and just kind of how should we think we bought it that's when we'll probably.
Speaker Change #108: You too long you can.
Thank you well the mass.
Speaker Change #108: In Air D. C's business. This quarter really came from from three different areas. The first is that the new model. The aliexpress choice model has grown very rapidly.
Joseph C. Tsai: So, as I say, that's still in early testing, but we see excellent potential. Next question, please. Thank you. Your next question comes from Ellie Jang with Macquarie. Please go ahead.
Speaker Change #108: No accounts for a very significant percentage of the business.
Speaker Change #108: Overall at the same time, it's an early stage business still being developed it's a business that has very strong scale effects. So our priority is to invest in scaling up the business and where the business has achieved scale then as it grows.
Ellie Jang: Thank you so much for taking my question. I just have a follow-up question on the AIDC international unit. The management earlier shared some exciting developments in the overseas market, but it seems like this quarter, the international unit basically saw a very big widened loss of around 3 billion RMB. So just wondering, how do we anticipate the investment pace onwards, considering certain key kinds of growing markets, such as Aliexpress Choice, the hybrid model, as well as the trend deal, seem to be still in the very early development stage? So, going forward, how do we really evaluate the economics as well as the competitive landscape? Thank you. I would like to ask you about AIDC in the future. Because the management has introduced a lot of new investments, such as AIDC. However, we can see that AIDC's deficit is still expanding to 3 billion RMB. So we want to know the speed and rhythm of your future investment. We know that Aliexpress Choice, the new mixed model, and Trendio are all early developments. Chateau.
Speaker Change #108: The loss will narrow and the business will become profitable.
Speaker Change #108: The second thing that contributed to the losses. This quarter was significant spending on marketing and some major promotions that we did.
Speaker Change #108: And thirdly, some investments that we've made in the middle East and other.
Speaker Change #108: Key markets.
Speaker Change #108: Going forward I think that will.
Speaker Change #108: We will continue to be making large investments in this business in particular around choice, we see very clearly the choices delivering a better user experience and resulting in a much better user retention than the previous model. So over a longer period of time, where we're certain the choice will produce very positive investment.
Speaker Change #108: Returns, but the priority right now the number one priority is to continue to invest in scaling up the business.
Speaker Change #109: Next question final question.
Speaker Change #110: Thank you.
Speaker Change #110: Next question comes from Jai long she with Nomura.
Jai Long: Please go ahead.
Jai Long: Thanks management for taking my question is why do you think it's all of it.
Jai Long:
Jai Long: Well you know I know when you do go into each of your jaw and teeth.
I've got plenty of time, just a jeep alright, thanks, how much of it you'll hear me pause or slow up on my own kind of let's call. It neutral.
Ellie Jang: Yes, I want to say that the loss of this quarter is mainly caused by three aspects. The first is that our Arctic Trials Choice model is largely affected by the ratio of our entire cross-border business. We are still in the early stages of this model, and this model has a very obvious scale effect.
Jai Long: Uh huh.
Jai Long: Hum.
Jai Long: Taken immediately park <unk>.
Joseph C. Tsai: So in the early stages, we will invest to increase the scale. We are looking for a long-term and profitable chain. The second reason is that we will spend more money on marketing. The third reason is that we will invest in the new market, including trends in the Middle East as a whole. In the near future, I think it will be a large-scale investment. The user experience and user memory of the CHOICE model have increased significantly compared to the previous model.
Jai Long: D C. The tourists that way.
Jai Long: Yeah, TVN, Oh, well, then take a bond I think highlight.
Jai Long:
Jai Long: Thompson woman.
Jai Long: <unk> does not have to compete.
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Joseph C. Tsai: We also believe that in a longer period of time, our investment can have a better recovery. So we will still prioritize the scale of growth. Thank you. Well, the loss in AIDC's business this quarter really came from three different areas. The first is that the new model, the AliExpress Choice Model, has grown very rapidly, but it accounts for a very significant percentage of the business overall.
Jai Long: Finally, Nick it'd take Tom I'll take that so called P. D. I believe that's all you.
Jai Long: You need to do anything on it is on the deal.
Jai Long: Sanjay.
Jai Long: Do you think the Lazard on that's either internal system beyond well nicely as Luca indicated the contract.
Speaker Change #113: Thank you saw a couple of quick questions for management, if I may 1st of all I'm wondering if you could respond to a recent media report, saying that the Alibaba group would be considering selling solar market.
Joseph C. Tsai: At the same time, it's an early-stage business still being developed. It's a business that has very strong scale effects, so our priority is to invest in scaling up the business. And when the business has achieved scale, then as it grows, the...
Speaker Change #114: You could respond to that please.
Speaker Change #115: Second question has to do with our AI D. C. Can you tell us how big a lazard as businesses in southeast Asia, and the impact that you've seen in Indonesia from the team up between Tic Toc and it's a local partner.
Joseph C. Tsai: The second thing that contributed to the losses this quarter was significant spending on marketing and some major promotions that we did, and thirdly, some investments that we made in the Middle East and other key markets. Going forward, I think that we'll continue to be making large investments in this business, in particular around choice. We see very clearly that Choice is delivering a better user experience and results, and much better user retention than the previous model, so over a longer period of time, we're certain that Choice will produce very positive investment returns, but the priority right now, the number one priority, is to continue to invest in scaling. Next question, final question. Thank you. Your next question comes from Jialong Shi with Nomura. Please go ahead.
Speaker Change #116: Oh, well I, we've always had the Eagle and T. L E K.
Speaker Change #117: Hey, good.
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Speaker Change #117: Thanks. This is Toby I'll take the first question I don't think there's any need for us to make further comment because we've already addressed that rumor and haven't stated that that's not true.
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Toby: As far as Alibaba is concerned or otherwise a very important asset for us in the hyper local segment.
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Speaker Change #118: Thank you well southeast Asia continues to be a very important market for us and there remains significant potential for us to deepen our penetration in southeast Asia are our approach is.
Speaker Change #118: To continue to balance efficiency against growth to continue to work to narrow the losses in the business while maintaining growth.
Speaker Change #118: So going forward our strategy will be to continue to make.
Speaker Change #118: Investments on an appropriate scale to grow in southeast Asia.
Speaker Change #118: As far as the restrictions imposed by the Indonesian authorities.
Speaker Change #118: You don't see an impact on us is relatively limited because we are always abide by regulatory requirements.
Speaker Change #119: Hello, everyone and thank you for joining today's earnings call that concludes our earnings.
Jiong Shao: Thank you. So, a couple of quick questions for management, if I may. First of all, I'm wondering if you could respond to a recent media report saying that the Alibaba group would be considering selling Ullama. The second question has to do with AIDC.
Speaker Change #120: Hey, please reach out to us if you have any questions and we'll see you next quarter. Thank you.
Speaker Change #121: That does conclude our conference for today. Thank you for participating you may now disconnect.
Speaker Change #121: Yeah.
Joseph C. Tsai: Can you tell us how big Lazada's business is in Southeast Asia and the impact that you've seen in Indonesia from the teaming up between TikTok and its local partners? I would like to answer the first question.
Speaker Change #121: Yeah.
Speaker Change #121: [music].
Speaker Change #121: Yes.
Speaker Change #121: Uh huh.
Speaker Change #121: Yeah.
Speaker Change #121: Sure.
Speaker Change #121: Okay.
Speaker Change #121: [music].
Speaker Change #121: Okay.
Speaker Change #121: [music].
Joseph C. Tsai: We have already filed a complaint against the market, so I don't need to say more. At the same time, I would like to say that, from the perspective of ELEMA, it is a very important asset for us to enter the market. We have already stressed this in our complaint, so I don't need to say more. Thanks. This is Toby.
Speaker Change #121: Uh huh.
Speaker Change #121: Yeah.
Speaker Change #121: Yeah.
Okay.
Speaker Change #121: Yeah.
Speaker Change #121: Yeah.
Speaker Change #121:
Speaker Change #121: Yeah.
Speaker Change #121: [music].
Joseph C. Tsai: I'll take that first question. I don't think there's any need for us to make further comment because we've already addressed that rumor and have stated that it's not true. As far as Alibaba is concerned, Ulema is a very important asset for us in the hyperlocal economy. First of all, I want to say that Southeast Asia is still a very important market for us. There is still a lot of room for growth in Southeast Asia. In the future, we will maintain a balance between efficiency and scale growth. We are also quickly collecting our losses and maintaining growth. So, in Southeast Asia, we will continue to invest on such a controllable scale. As for the restrictions on cross-border travel in Indonesia, we have always adhered to the local regulatory rules, so our influence is relatively small.
Speaker Change #121: Uh huh.
Speaker Change #121: [music].
Speaker Change #121: Uh huh.
Speaker Change #121: Uh huh.
Speaker Change #121: Okay.
Speaker Change #121: [music].
Speaker Change #121: Okay.
Speaker Change #121: Okay.
Speaker Change #121: [music].
Speaker Change #121: Okay.
Speaker Change #121: [music].
Speaker Change #121: Yes.
Speaker Change #121: [music].
Speaker Change #121: Okay.
Speaker Change #121: Okay.
Speaker Change #121: [music].
Speaker Change #121: Okay.
Speaker Change #121: Okay.
Speaker Change #121: Yes.
Speaker Change #121: [music].
Speaker Change #121: Okay.
Speaker Change #121: Okay.
Speaker Change #121: [music].
Speaker Change #121: Okay.
Speaker Change #121: [music].
Speaker Change #121: Uh huh.
Speaker Change #121: Hum.
Speaker Change #121: Yes.
Speaker Change #121: [music].
Speaker Change #121: Okay.
Speaker Change #121: [music].
Joseph C. Tsai: Thank you. Well, Southeast Asia continues to be a very important market for us, and there remains significant potential for us to deepen our penetration in Southeast Asia. Our approach is to continue to balance efficiency against growth, to continue to work to narrow the losses in the business while maintaining, So going forward, our strategy will be to continue to make investments at an appropriate scale to grow in Southeast Asia. As far as the restrictions imposed by the Indonesian authorities are concerned, the impact on us is relatively limited because we always abide by regulations.
Operator: Thank you for joining today's earnings call. That concludes our earnings for today. Please reach out to us if you have any questions, and we'll see you next quarter. Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect. Thank you for joining us. Thank you. Thank you for watching! Youssef Squali, Mark Mahaney, Ken Sena, Zachary Schwartzman, Eddie Leung, Gregory Zhao, Youssef Squali, Mark Mahaney, Ken Sena, Zachary Schwartzman, Alicia Yap, Alan Hellawell, Mark Mahaney, Ken Sena, Zachary Schwartzman, Eddie Leung, Ken Sena, Robert Lin, Gregory Zhao, Alibaba Youssef Squali, Mark Mahaney, Ken Sena, Zachary Schwartzman, Eddie Leung, Gregory Zhao, Alibaba Youssef Squali, Ken Sena, Zachary Schwartzman, Eddie Leung, Gregory Zhao, Alibaba Youssef Squali, Gregory Zhao, Alibaba Youssef Squali, Gregory Zhao, Alibaba Youssef Squali, Gregory Zhao, Alibaba Youssef Squali, Gregory Zhao, Alibaba Youssef Squali, Gregory Zhao, Alibaba Youssef Squali, Gregory Zhao, Alibaba Youssef Squali, Gregory Zhao, Alibaba Youssef Squali, Gregory Zhao, Alibaba Youssef Squali, Gregory Zhao, Alibaba Youssef Squali, Gregory Zhao, Alibaba Youssef Squali, Gregory Zhao, Alibaba Youssef Squali, Gregory Zhao, Alibaba Youssef Squali, Gregory Zhao, Alibaba Youssef Squali, Gregory Zhao, Alibaba Youssef Squali, Thank you for watching!
Speaker Change #121: Yes.
Speaker Change #121: Yes.
Speaker Change #121: Yeah.
Speaker Change #121: [music].
Speaker Change #121: Okay.
Speaker Change #121: [music].
Speaker Change #121: Okay.
Speaker Change #121: Uh huh.
Speaker Change #121: Okay.
Speaker Change #121: [music].
Operator: Youssef Squali, Mark Mahaney, Ken Sena, Zachary Schwartzman, Alicia Yap, Alan Hellawell, Mark Mahaney, Ken Sena, Zachary Schwartzman, Eddie Leung, Binnie Wong, Gregory Zhao, Alibaba Youssef Squali, Mark Mahaney, Ken Sena, Zachary Schwartzman, Eddie Leung, Binnie Wong, Gregory Zhao, Alibaba Youssef Squali, Mark Mahaney, Ken Sena, Zachary Schwartzman, Eddie Leung, Binnie Wong, Gregory Zhao, Alibaba Youssef Squali, Mark Mahaney, Ken Sena, Zachary Schwartzman, Eddie Leung, Binnie Wong, Gregory Zhao, Alibaba Youssef Squali, Mark Mahaney, Ken Sena, Zachary Schwartzman, Eddie Leung, Binnie Wong, Gregory Zhao, Alibaba
Speaker Change #121: Uh huh.
Speaker Change #121: [music].